IBEC tells government not to increase costs on work in budget

Tuesday 02 October 2012 15.44
IBEC says there's widespread concerns about statutory sick pay proposals being floated.
IBEC says there's widespread concerns about statutory sick pay proposals being floated.

The chief economist of IBEC has said the most important thing for the Government to do in the budget is to avoid putting additional costs on work and employment.

Fergal O'Brien said there were concerns amongst the employers' group's 7,500 members about some of the issues being floated, such as statutory sick pay proposals.

He was speaking at the Oireachtas Committee on Jobs, Enterprise and Innovation.

Mr O'Brien warned that both large and small employers were concerned.

He said that placing additional costs on labour for companies would mean savings having to be achieved elsewhere from their labour cost bills. Such savings included hiring less, cutting back on overtime or redundancies.

He warned that multinational employers already had their labour cost budgets signed off for next year. He said if Government proceeds, than those companies will have to make savings elsewhere.

Mr O'Brien also warned that a proposal to collect the property tax through income tax credit system would be perceived as a tax on work and undo the merit of having the tax in the first place.

He said it would be seen as a tax that targets workers.

On cutting child benefit payments, Mr O'Brien said IBEC estimated that one quarter of the payment was currently going into savings accounts.

However, he warned that cutting the payment amongst low income families, would translate into less being spent in the domestic economy.

Meanwhile the chairman of the Small Firms Association, Ian Martin, said social welfare should be cut rather than taxes being increased to balance the budget.