David Broderick
Director, Small Firms Association
Navigate Ireland’s economic landscape amid global turmoil. Learn how small businesses cope with rising costs and governmental policies.
Despite recent political uncertainty and international challenges, the Irish economy is in great shape. This is due to high exchequer returns, low unemployment and a thriving private sector. While Ireland Inc. is in a good place, the small businesses are vulnerable due to high input business costs. With additional labour market measures coming down the pipeline, many small businesses will struggle to remain viable.
Small business value and challenges
Small businesses — organisations that employ up to 50 people — are the lifeblood of communities and are a vital component of the overall economy. Around 98% of all enterprises in Ireland are small businesses and generate around 70% of all jobs in the ‘non-financial business economy.’
There is a strange irony, that many small firms have high turnovers, more business transactions and high footfall from customers. However, these positives have been vastly offset by high business costs. From talking to our members, many firms are expected to see input business costs increase by up to 30%.
Policies strain small businesses
This is primarily due to the Government’s labour market policies, which have recently come into force. These increases disproportionately impact small firms and thus, are more vulnerable to financial failure.
Successive political leaders have stated the desire for Ireland to be ‘the best little country in the world’ to do business in. While no one doubts the ambition of these encouraging statements, current policies will compromise the integrity of this ambition.
Around 98% of all enterprises in Ireland are
small businesses and generate around 70% of
all jobs in the ‘non-financial business economy.
Tax relief welcomed
The Small Firms Associations welcome the recent announcement from Minister for Finance, Michael McGrath T.D., concerning the changes to the Tax Debt Warehousing scheme, which reduces the interest rate on warehoused tax debt to 0%. This is a positive step, but there is more to do.
To give small firms a chance to absorb these punitive measures, the Government must consider a pause on all forthcoming labour market policies. To put it plainly, there have been too many regulations in too short a time for small firms to adjust to. Spreading out these increased costs will enable businesses to chart a course to prosperity.
Inaction risks economic decline
Government inaction will result in empty shopfronts on our high streets, long queues of people seeking unemployment benefits and, ultimately, shatter the ambition of being the ‘best little country in the world’ for business — a goal once thought achievable.
