Good morning everyone and welcome to this launch event marking the commencement of the work of the Low Pay Commission.
I would like to welcome the Members of the Commission who are here today. I would like to thank Dr Donal de Butléir, who has agreed to serve as Chair of the Commission, and all the Members of the Commission for taking on this extremely important role.
I would also like to welcome Mr. David Norgrove, Chair of the UK Low Pay Commission, who has been most helpful with his advice to date and who is to meet with the Commission later this morning.
The Government has established the Low Pay Commission because it believes that gainful employment is the only sustainable route out of poverty.
Work should pay more than welfare, and no household with a person in full-time work should be poor.
This is not always the case at the moment.
According to the most recent data from 2013, families where the head of the household was at work still accounted for almost 9% of those classified by the Government as “consistently poor” – a definition that comprises measures of both income and material deprivation.
This is morally unacceptable, and economically unwise.
As agreed between the Tánaiste and I in the Statement of Government Priorities last July, the Government has a three-pronged strategy to address this challenge.
First, we have established the Low Pay Commission.
As an independent body it is tasked with the critical job of making annual recommendations to the Government about the appropriate level of the minimum wage.
As included in its Terms of Reference, the Commission, utilising its own expertise, and drawing from other experts, will ensure that the minimum wage, is adjusted incrementally, over time. It will also take into account changes in earnings, productivity, overall competitiveness and the likely impact any adjustment will have on employment and unemployment levels.
For employers, a very significant benefit of the Low Pay Commission concept is that in assessing the national minimum wage annually, any adjustments into the future will be incremental and far less disruptive for business compared with the step changes witnessed in the past.
To protect existing jobs, I will also ask Government to look at measures to mitigate the impact any changes could have on small employers.
Of course, the minimum wage alone cannot address the challenge of eliminating poverty for those at work.
The second element of our strategy is to reduce taxation on low- and middle-incomes.
In particular, it is why we have taken 410,000 low paid workers out from Fianna Fail’s USC charge over successive budgets.
I have committed to continuing this policy of targeted tax reductions for workers in the next budget and increase to 500,000 the number of low paid workers that this Government has removed from the USC.
The third element of our strategy is to introduce targeted welfare supports for people returning to work, and particularly for the low-paid.
From April, the Government will pay €30 a week to mothers or fathers returning to work from long-term unemployment for each child for the first year, and €15 per week per child for the second year.
For those trapped on rent supplement that cannot go back to work because they will lose their housing support, we are now rolling out a new Housing Assistance Payment. The assistance from the State will be based on how much you earn and not by your employment status.
In the coming weeks, the Government will also respond to the recommendations from the Advisory Group on Tax and Social Welfare on the establishment of a new in-work benefit to make sure that everybody has the incentive to work, and that every extra hour worked results in more disposable income.
As a package, I expect these measures to have a transformative effect on incentives to work and on reducing the poverty rate among those at work.
The Low Pay Commission has been asked to deliver its first recommendation by mid-July this year. In return I’ve committed that the Government will not delay in considering its recommendations.
I want to wish the Commission well in its endeavours.
Thank you very much.
ENDS