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EC backs property and pollution taxes to boost labour market

THE EU Commission is in favour of property tax, along with pollution and consumption taxes, as a way of reducing the burden of taxes on labour and assisting employment.

Setting out new proposals to increase employment in the EU, the Brussels executive advocates the paying of state benefits to people in jobs as a way to alleviate in-work poverty or encourage the take-up of work.

Such payments apply in several EU states. "Common features of schemes which supplement workers' earnings include the targeting of low- income individuals or households, and a gradual phasing-out with increased earned income," the commission says.

"The higher 'take home' pay represents an employment incentive for less skilled workers while, for a given level of wage, employers will more easily fill vacancies with wage pressure alleviated.

IBEC conference

At a conference organised by the Irish Business and Employers Confederation yesterday, its director, Danny McCoy, said the next eight years could see Ireland regain the two million-strong workforce it had at the height of the boom.

IBEC said high energy and local authority charges, along with regulated wages, were significant issues when it came to job creation in the small- and medium-sized business sector.

Mr McCoy said the Irish economy had the potential to grow by 3pc to 4pc a year over the next 20 years. That would be twice the average forecast for the EU as a whole.

"Business can generate the growth needed to create jobs, overcome our debt burden and deliver the prosperity, public services, and quality of life that this country can legitimately aspire to," he said.

The commission report says wage rises should be tied to increases in productivity, rather than measures such as inflation.

"In accordance with national practices of collective bargaining, wage developments should (also) take account of the competitive position of the member states."

Commission

The commission suggests that employment support, such as re-training, should be targeted at groups with the greatest potential, such as unemployed workers with professional skills, women or young people.

It says the EU must exploit the job-creation potential of the transition towards a low-carbon and resource-efficient economy, the ageing of society and rapid technological advances.

The commission warned it would take tougher action against member states that do not enforce and promote the rights of immigrant workers from other EU states. Fear of losing out on social security and pension rights is still a major issue for workers and jobseekers thinking of moving across Europe, it says.

"Many mobile workers are still unaware of their rights and obligations.

"Overall, the failure to apply the existing EU rules means the commission will need to explore additional enforcement mechanisms in the pursuit of effective free movement of workers."

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