The Taoiseach and I spoke recently about the minimum wage increase. At the time, he said to me that, on the one hand, I was welcoming the wage increase, which I do, but that I also wanted protection for businesses that will be impacted by the wage increase and had asked what the Government could do to counteract it.

The issue has now come to the fore, given the Taoiseach has, I believe, received a letter from IBEC outlining its concerns about the additional costs his Government has set out. The letter highlights specific worries about the pace and scale of the Government increases in labour costs, including an increase in the minimum wage to €12.70 and changes to employer PRSI, statutory sick pay, pension auto-enrolment, work permits, salary thresholds and protective leave entitlements. IBEC estimates the Government's labour market policy will add €4 billion annually to the wage bill of Irish employers, leading to labour cost increases of 25% to 30% in the most impacted firms. According to an article on the RTÉ website, one third of new companies close within the first four years of their existence. It states that the post-Christmas period has seen a wave of restaurant closures in Ireland and that the Restaurant Association of Ireland, RAI, claims 280 of its members have closed in the past six months. I urge the Government to intervene in this.

I am an employer myself. I agreed with the minimum wage increase and all the employers I have spoken to also agreed with it, but it has created inflation in certain cases. In the hotel industry, the minimum wage was increased to €12.70, but people who were on €13 then wanted to go to €14.30 and there was a knock-on effect through all the wage increases on all hospitality sectors. In the case of one business whose owner I spoke to, which has seven employees, two of whom are part time, it amounts to an increase of €40,000 to its costs.

The only way they can counteract that and pay the increase in the minimum wage, which they said the employees deserve, without increasing the price of their product is by going into their maintenance fund. They said that by going into their maintenance fund, if anything breaks down, they will have to close anyway. If they put the prices up, the same wage increase we are giving will actually be taken back in and means they will not be sustainable anymore. Representatives from one hotel I spoke to said this will actually cost them €400,000 extra this year. For a wedding or a major event, the increase will be by €4 per sitting. This means it will go to the same people who will have got a wage increase but will actually go back again into the Government’s purse as it goes around in a circle.

I thank the Deputy for raising this important issue. I know many Deputies have done so, in Government parties and Opposition parties alike. We are a Government that supports enterprise and wants to make work pay. We believe it is possible to reward enterprise and reward work. However, there are interplays and balances that have to be struck, and we have to strike them right.

I acknowledge that the cost of doing business is very high and is rising. Some of that is down to pay. Much of it is down to energy. Some of it is down to the cost of supplies and materials. Some of it is Government-influenced, but the Government has no influence over much of it. We are helping businesses. More than a quarter of a billion euro will be injected into small businesses in the form of grants by the end of March. That is designed to help businesses with cash flow, particularly at this very difficult time.

We are now seeing energy prices falling, which is very encouraging. I hope we will see interest rates falling throughout the course of this year as well. The increase in the minimum wage was recommended by the Low Pay Commission, and our plan is to bring the minimum wage up to the level of the living wage, which is approximately 60% of median earnings. We want to do that as soon as we possibly can. We acknowledge, however, that we have to monitor how this works out on the ground, because we have seen very big increases in the minimum wage in recent years. While it is not double, it is much higher than it was ten or 11 years ago. Despite a very big increase in the minimum wage, we have not seen unemployment rising. In fact, the reverse has happened. There are more people at work than ever before.

While businesses are opening and closing all the time, the number of closures at the moment is below the long-term average of 50 per 10,000. However, this is something we will have to monitor very closely, because there is no point in putting up somebody’s wages if they then lose their job or have their hours cut. This is something we will have to monitor over the next couple of months and take account of when the Low Pay Commission makes its recommendation for next year, because there are other employment-related costs that are going to rise, such as pension contributions under auto-enrolment and the 0.1% increase in PRSI.

I take very seriously what businesses are saying. We acknowledge that the cost of doing business is high. We are helping, particularly with the quarter of a billion euro we will inject into small businesses over the next couple of months. The key thing we need to monitor is whether there is a fall-off in employment as a consequence of this increase and whether we will see businesses closing at a faster rate than they would on the long-term average. We are not seeing that yet, but we do need to look out for it.

Most of the businesses that are closing are SMEs: small, local and medium enterprises. They are not international businesses. They are small, local enterprise businesses. What the Government could have done in the interim, which would have had an immediate effect, was to have reduced VAT back to 9% across the board. It was brought in for the interim before. It worked and it could work now until we find a solution.

I am a father and a grandfather. I listened to a man recently, as I have listened to many parents recently. They have four children and their fourth child is now leaving the country to set up their life in another country. They are following their brothers and sisters across the water. The young man said to his father, “Dad, I am sorry, I am going". He said he will never afford a house in this country, that he will live and work here but never have anything here. He said he will now follow his brothers and sisters to create a life. We have all seen people leaving this country in their youth, and then come home to set up their families and live here. He said that will no longer be the case. They are leaving and they are not coming home because they no longer see home as sustainable for them to raise their families into the future. They have to do it in another country because they cannot do it at home.

I am asking the Taoiseach to intervene now, reduce the VAT rate to 9% now and protect our small businesses. The multinationals can protect themselves but our Irish local businesses need the Government's help and need it now.

Businesses, particularly small businesses, have received unprecedented support from Government over the past three or four years. During the Covid-19 pandemic, we helped pay the wages and the overheads. During the energy crisis, we helped with the energy bills through TBESS. We reduced VAT to 9% on a temporary basis-----

It worked.

-----we brought in tax warehousing and we also have a new grant which businesses will receive in the next couple of months. The sad reality is that there are a number of businesses in the State which have only got by in the past couple of years because of that State support and some of those are not viable. That is a sad truth but one no Government can simply subsidise forever.

On the story the Deputy tells about somebody emigrating to set up their lives abroad, of course that happens. It happens all the time for all sorts of different reasons. Let us not forget that in each of the past seven years, the number of Irish citizens leaving has been less than the number of Irish citizens returning or has been roughly the same. There is this narrative that huge numbers of Irish people are abandoning the country for better lives abroad, but the truth is different.

They are not coming home.

They are. The Deputy is entitled to his opinions, but he is not entitled to his own facts. The facts are that in the past three years, 80,000 Irish citizens left and went abroad for all sorts of different reasons. A total of 90,000 came back. That is a fact, Deputy.

Those are the statistics.

When we find out how many are leaving this year, we will see it is much more.