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TÁNAISTE LEO VARADKAR has received the Low Pay Commission’s report on establishing a living wage in Ireland and plans to bring proposals to Government before the summer recess.
Speaking at the Royal College of Physicians this evening, Varadkar said he had just received the report, indicating the Government will be among the early movers in adopting a national, mandatory living wage.
Varadkar also used his speech to reiterate that he believes now is the time to index the tax bands further.
He said opinion is divided on how to calculate what a living wage should be.
“I see merit in the basket of goods and services approach – that each year we would decide what is needed to achieve an agreed standard of living – but I also think that approach would be subjective. We would have inconclusive debates about what should be in the basket and how much should be in it,” he said.
However, Varadkar said an alternative approach is setting the living wage as a percentage of the median wage.
“This approach is simpler and provides certainty,” he added.
Speaking about concerns Irish businesses might have, particularly having endured a two year pandemic and now facing increased costs due to the war in Ukraine, Varadkar said any reforms to wages should be phased in.
Phased approach
In the UK, a targeted future living wage rate was set five years in advance, he said.
“This is something we could do in Ireland. Companies would have the time to plan, prepare and adjust,” said the Tánaiste.
“A living wage will be an important milestone for workers in Ireland,” he said.
Varadkar said the inflationary cycle right now cements the need to index the tax bands further.
He said employers should look at pay increases for workers, but added:
“I do believe there should be pay rises and indeed further increases in pensions and welfare.
“I also believe that it is a mistake to think that pay rises will solve the problem of inflation. Pay rises won’t bring down the price of anything. And pay rises could actually contribute to inflation and make the situation worse. That is why we have to look at these things in the round,” said Varadkar.
He said there is a need “to reduce the income tax burden on middle-income earners in particular so they can keep their pay rise if they get one and at least get something back in their pockets if they don’t”.
“I can’t understand why the Opposition parties continue to oppose the indexation of tax bands.
“The case for it is never stronger than now given inflation. Not to do so puts the entire burden on the employer to provide pay rises and will leave some workers with nothing if their employer cannot afford to do so,” he added.
October’s budget
Giving a hint what might makes it way into Budget 2023, Varadkar said next year, increased subsidies should be used to reduce the costs of childcare “considerably” for parents.
“This will increase disposable family incomes and make it more attractive for parents to return to the labour market thus helping to fill vacant positions and moderate wage inflation,” he said.
“We should also reduce charges for healthcare, the cost of public transport and higher education. Other Europeans simply do not have to pay so much to see their doctor, attend a hospital or buy medicines,” he added.
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I have to say he’s sum man for wanting employees to be paid more ,more holidays etc etc lately who would want to own a business sweat Jesus he’s alrite getting his big pay packet not a care giving for the small corner shop at all lives on a cloud and a nice one at that I’m sure
@christopher dyas: if your business can only succeed because you’re workers live in poverty why should your business succeed. Workers have no interest in maintaining the lifestyles of their employers while they choose between food and fuel.
@Liam Edward Harris: I don’t own a business my wife does i work in a shop also trying to make a living
@Liam Edward Harris: bang on son
@Liam Edward Harris: assuming all businesses have profit margins such as amazon. I mean there are many employers also choosing between food and fuel but get no assistance as employers and not employees. Often they are trying to get throu this period to keep the staff paid for when more lucrative periods like summer come along. Alternative is the employees job goes.
@Liam Edward Harris: tell that to the thousands of low paid workers working in huge multinational companies that make millions in profits every year
“To be discussed in the summer……”, I suppose going on past promises it will be the summer of 2030. The first thing they should tackle when they get around to it is Zero-Hour contracts, it is so exploitative of workers.
@Liam Edward Harris: * your workers.
@Frank Cauldhame: Loads pf jobs out there not zero hour contracts. If you don’t want to take a zero hour contract job don’t take it.
This man will do or say anything to try to be relevant.. ministers must be due another rise and he is trying to soften the blow by asking employers to give employees a rise.
Will be interesting to see will the civil servants get the rise hes talking about ..
This sounds good in fairness if implemented correctly. My main grievance related to stuff like this is I just don’t think pay/welfare/benifits are linked up well in this country at all. Nobody who works should be worse off than anyone who doesn’t work, sometimes that’s the case due to social welfare/medical card/fuel allowance/HAP/social allowance/back to school/college grants & fees etc. A lot of the minimum amounts receivable for some of these go from a pretty generous to absolutely nothing in the space of a few extra euro in your income. I really think more needs to be done especially with housing. Why can’t people renting get some tax rebates depending phases depending on their income and the same with a mortgage, even €100—€200 a month would be helpful.
@DK: But you earn over a certain amount in this country and you get next to nothing.
@DK: it’s your attitude that’s wrong. “Get nothing”. These things should be short term supports. Not a life long freebie. I’m absolutely sick to my teeth paying 47% of my salary to pay for a free ride for so many. Living wage my ar&e. Get up get a job. Nothing is a right it’s a responsibility.
@Dave Connolly: Isn’t living wage a salary? So to get a living wage you would be working no?
@Dave Connolly: 47%!!!??? So you must earn over €200,000 to be paying that much tax, I admire that you’ve been able to earn that much!!
Or do you maybe mean a marginal rate of 47%?
Agree that tax rates in Ireland are ridiculously high and that you get nothing for it
@Dave Connolly: the free ride i think you are talking about are ministers and senior civil servants?
He would waffle anything just to shift any responsibility away from him and the rest of the muppets in the gov.
Next thing you know FFG will be doing a ‘Bertie’ and claiming they are socialists :-)
He should do a tictoc
@Darren Mc Mahon: It’s tiktok you troglodyte. Boom on boomer!
Is some of the calculations for the living wage that you can afford 2 roast dinners a week still a question they use. They need to reassess their ideas before getting the final figures.
Another Labour initiative stolen by FG.
@Jack Cass: Well Labour supported every austerity measure when in government. Became more Blueshirt than the Blueshirts.
Is there an election coming up ??
All these sound bytes are sounding as if there is.
have your say