Fianna Fáil Small Business Spokesperson John McGuinness TD has said that reductions in the redundancy rebate amounts to a €280m stealth tax on small businesses: “By slashing the amounts that employers may claim, Jobs Minister Richard Bruton has effectively signed off on a crippling €280m jobs tax.”

Deputy McGuinness pointed out that Minister for Social Protection Joan Burton recently revealed that the total amount paid out in redundancy rebates to employers in 2010 was €373 million.

He commented, “If the rate of redundancies remains the same, reducing the rebate to 15% would see the government paying just €93m next year, meaning employers would have to pick up an additional bill of €280m.

“Many hard-pressed small and medium businesses will simply not be able to pay these massive costs. Workers who are made redundant could see their redundancy payments slashed.

“It will also see many small businesses reluctant to take on workers, given the extra costs they would face. This will lead to the jobs crisis being prolonged rather than tackled.”

Deputy McGuinness concluded, “However, the move was not even mentioned by Minister Bruton in his statement on the budget. He also chose to ignore cuts to current spending in his Department and instead re-announced measures already announced in November’s capital expenditure plan. This once again shows that this Government is more concerned with spin than substance.

“Minister Bruton must urgently answer how he expects businesses to shoulder this additional burden, on top of a 2% VAT increase, and all of the other pressures they face on a daily basis.”