PRESS RELEASE – Increase in Social Insurance contributions
The GFSB notes with dismay the increase in social insurance contributions announced by the Government last week.
The biggest burden resulting from these increases will be on those businesses that have suffered the most through Covid and are still struggling to get back on their feet – retail, food and beverage as well as others. These are businesses that provide employment at the lower end of the pay scale and will be disproportionately affected by these measures.
Further, increasing the cost of employment will discourage employers from recruiting staff at a time when the employment market is also trying to get back to normal.
Whilst the Federation appreciates that the Government may need to increase revenue following on from the pandemic, this should be done in a balanced and measured way, with the burden distributed across the community.
The Government has previously promised to do away with sudden hikes in social insurance payments so as to provide certainty for businesses, but these measures represent a very large and unexpected increase in social insurance. Government should consider more equitable income raising measures that do not target the lowest paid, and the smallest businesses, as well as ensuring that increases are incremental.