Statement on the publication of the impact report of government-imposed labour costs on businesses

March 11, 2024

Ibec, the group representing Irish businesses, notes the Government's report on the cumulative impact of government-imposed labour costs on businesses. The report aligns with Ibec’s analysis and advocacy, urging the Government to acknowledge the cumulative effects of labour market policy decisions that have significantly increased costs for vulnerable companies and sectors.

Speaking on the publication, Danny McCoy said: '"The report’s effectiveness hinges on how support is provided to sectors facing unsustainable cost hikes due to government policies. Some sectors, as noted in the report, are projected to experience nearly a 20% rise in labour costs over the next two years, even before factoring in subsequent pay pressures or standard wage growth.

The PRSI system is the most administratively straightforward and targeted way to address these issues. The Government must introduce a PRSI rebate for the most exposed companies in line with their exposure to rising costs, along with increasing the top-rate employer PRSI threshold above the minimum wage and commit to a new ‘Competitiveness Charter’ which sets an annual ceiling on the total amount of additional labour market costs which will be imposed on business in any single year.”