1076. Deputy Ken O'Flynn asked the Minister for Enterprise, Tourism and Employment the assessment made by the Department of the cumulative impact on small and medium retail businesses of recent increases in labour costs, including the national minimum wage, pension auto-enrolment, employer PRSI and statutory sick pay, in the context of the 35% increase in retail insolvencies recorded in the first half of 2026; and if he will make a statement on the matter. [63738/26]

The Government recognises that the cost of doing business has been a significant issue for firms in recent years, driven by wider inflationary pressures and increasing operating costs, particularly for SMEs, including those in the retail sector. The Government continues to actively monitor cost developments in the retail sector and across the wider economy.

My Department, in collaboration with the Department of Social Protection, assessed the cumulative impact of changes to working conditions and labour costs, including the Auto-Enrolment Retirement Savings Scheme, Parent's Leave and Benefit, Statutory Sick Pay, the Additional Public Holiday, the Living Wage, and Remote Working. This report was published on 5 March 2024. The assessment acknowledged that businesses may face rising costs, particularly in the short term, as a result of these measures.

Reflecting the findings of this assessment, a range of supports were introduced to assist businesses in managing increased costs and strengthening competitiveness. These measures included making available up to €15 million through the Local Enterprise Offices to provide top-up supports under the Energy Efficiency Grant Scheme for businesses in the retail and hospitality sectors; consideration of options relating to the lower 8.8% rate of Employer PRSI contributions; and measures aimed at reducing administrative and regulatory burdens, including an enhanced SME Test and the accelerated roll-out of the National Enterprise Hub to provide advice and support to vulnerable firms.

In addition, a number of measures were introduced in 2025 to help minimise cost pressures on businesses. These included extending the timeline for the introduction of the Living Wage by three years, from 2026 to 2029, and pausing any further increases under the Statutory Sick Leave Scheme.

The Government also established the Cost of Business Advisory Forum in June 2025. The Forum brings together representative bodies from enterprise, manufacturing, retail, hospitality and agri-food sectors, alongside senior officials from Government Departments, regulators and State agencies. Over the past year, the Forum has examined a range of issues affecting business competitiveness, including energy costs, insurance, planning and infrastructure, water services, legal costs, regulatory compliance, and access to finance.

Representatives from across the enterprise sector, including SMEs, highlighted the real-world impact of sustained cost pressures and regulatory requirements on day-to-day operations, investment decisions and competitiveness. The Forum's Final Report, published on 28 August 2026, identified six recurring themes: energy costs; price transparency and switching; engagement between regulators and businesses; regulatory reform; legal reform; and competition in the banking sector. The report's recommendations are being considered by Government and a formal response is forthcoming.

With regard to the National Minimum Wage, the Government is committed to ensuring an appropriate balance between providing a fair and sustainable rate of pay for low-paid workers and maintaining the competitiveness and viability of employers, particularly in sectors facing significant cost pressures.

Last year, as part of measures designed to bolster business resilience and competitiveness, the Government agreed to extend the timeline for progression to a Living Wage from 2026 to 2029. This decision reflected the challenges faced by the enterprise sector in recent years, particularly SMEs operating in the retail and hospitality sectors where a significant proportion of minimum wage workers are employed.

The progression to a Living Wage, set at 60 per cent of median hourly earnings, will continue to be achieved through incremental adjustments to the National Minimum Wage. Future decisions will be informed by the recommendations of the independent Low Pay Commission. The Commission adopts an evidence-based approach, taking account of economic conditions, labour market developments, productivity, competitiveness and income distribution when formulating its recommendations. The Commission's recommendations for the 2027 National Minimum Wage will be considered by Government in the context of prevailing economic conditions and as part of the Budget 2027 process.

I assure the Deputy that the Government and my Department remain committed to supporting SMEs, strengthening competitiveness and ensuring that labour market policies strike an appropriate balance between protecting workers and supporting sustainable business growth.