A Small Firms Association (SFA) delegation has met with Minister for Business & Employment, Gerald Nash to set out their priorities.
“The small business sector currently employs half the private sector workforce, some 700,000 people. Whilst an economic recovery is starting to take hold, many small businesses are just getting back on their feet, and their balance sheets remain challenged after after years of recession,” SFA chairman, AJ Noonan said.
“In order to secure the recovery and set small businesses on a path to growth, it is essential that competitiveness issues are prioritised in Government,” he added.
Irish labour costs are now 30.8% more than in the UK, 16% more than the EU average and 11th highest in Europe.
“This is putting us at a distinct competitive disadvantage, and is a particular problem for SMEs in the services sector where the cost of employing an individual accounts for over 80% of location sensitive business costs ( costs which vary by location rather than being set by a worldwide market).
“Government changes in PRSI, illness benefit, redundancy rebate, health insurance and general taxation all impact negatively. No further costs can be imposed through Budget 2015”, stated Mr Noonan.
The SFA chairman further commented to the Minister, “It is entirely premature to be talking about across the board wage increases, which small businesses can ill-afford and which would destabilise the Government’s job creation targets. Whilst much talk has been made about a Low Pay Commission, the fact is that even with the 3% increase in the UK national minimum wage from October, it will still only be the equivalent of €8.17 per hour, compared to our existing high rate of €8.65 per hour. We are opposed to any increase in the statutory minimum wage and mandatory sick pay or pension provision, which would have a devastating impact on the fragile recovery that is taking place in small firm employment.”
The SFA has called on the minister to put small business at the heart of economic policy-making.