Many small businesses ‘still waiting to feel any recovery’
The Small Firms Association (SFA) has painted a harsh picture of the realities facing Ireland’s small businesses as attention turns to Budget 2017.
The SFA, in a pre-Budget submission, has told the Government that “many small business are still waiting to feel the upturn”, eight years after the country lurched into recession.
The small business group’s remarks contrast sharply with recent GDP figures which suggested 26pc growth.
“This Budget comes at a time when the tailwinds that have propelled the Irish recovery over the past number of years are waning,” the SFA said.
“While for many the fragility of the crisis years have passed, the recovery has not been consistent regionally or sectorally. Many smaller businesses are still waiting to feel the upturn.”
Business sentiment has weakened considerably in recent months to its lowest level in three-and-a-half years, as concerns about Brexit and the global economy dented confidence.
About 80pc of companies surveyed in the most recent KBC Bank Ireland/Chartered Accountants Ireland Business Sentiment Index now see some implications of Brexit for their companies, with sterling weakness the main concern.
“Business costs are rising, many of the fundamental policy challenges facing the country have not been addressed and the international environment in which Ireland operates is uncertain, in particular in light of the UK’s decision to leave the EU,” the pre-Budget submission said.
Among small firms’ asks of Budget 2017 are:
Better rewards for work by increasing the entry point to the top rate of tax, as well as a 1pc cut to the rate.
Abolition of the 3pc Universal Social Charge surcharge for self-employed people.
Investment in rural broadband and public transport networks.
A reduced 9pc VAT rate for residential house-building for two years, to fix shortages.
The group also criticised rising wage costs.
The Government has committed to raising the minimum wage from €9.15 an hour to €10.50 by 2021.
It wants wages to be determined by the labour market, “not be determined by an artificial legal instrument such as the minimum wage”.
“Irish labour costs are the tenth highest in Europe and 20pc above the EU average. Irish small firms are at a competitive disadvantage relative to firms in the UK across a number of major business costs and total labour costs are 17pc higher in Ireland than in the UK,” it said.
Article Source: http://tinyurl.com/kbwqb42