Small businesses crippled by charges

SMALL and medium enterprises in Gort and Loughrea are being “crippled” by charges and taxes, according to a local county councillor.
Speaking on Tuesday before expected cuts in welfare payments, expenditure cuts and new taxes in Wednesday’s Budget, Councillor Bridie Willers stressed the Government had to seriously tackle the high cost of doing business for traders.
Commenting on previous pledges by the Government to tackle “upwardly only” rent reviews, the Fine Gael councillor said a new formula needed to be provided to reduce the cost of leases, which would in turn reduce the number of vacant properties.
In his 2011 Budget speech, finance minister, Michael Noonan stated, “It has not proved possible to develop a targeted scheme to tackle this issue that would not be vulnerable to legal challenge”.
Since first mooted by the Government, the proposed legislation has created uncertainty for both commercial landlords and tenants alike and has been accused of preventing any meaningful activity in the investment sector.
It is understood the proposed legislation was abandoned due largely to advice from the Attorney General that the provisions as proposed would be susceptible to constitutional challenge on a number of fronts and the Government was unlikely to be successful in defending this.
Councillor Willers said Galway County Council wasn’t in a position to reduce commercial rates due to the lack of funding from central Government.
“Small and medium businesses like hairdressers need a break. A lot of small businesses are just breaking even and are just hanging on due to the recession. Hopefully, Galway County Council will not be cut any more in terms of its allocation from central Government after achieving a 66% collection rate for the €100 Household Charge.
“If this rate was any lower, there could be further cuts. A lot of self-employed people have to try and remain in business because if they stop working, they are not entitled to dole.
“Businesses are also finding it very difficult to get credit. I know that a lot of businesses with a good credit rating are not even asking banks for money because they know they are not lending and will be refused,” she said.
Hilary O’Quigley from Hilary’s, Crowe Street, Gort, confirmed she is paying substantially more for water charges since the introduction of water metering in the South Galway town.
Having reduced prices to maintain business, Ms O’Quigley confirmed she had to work harder just to survive in the teeth of the economic recession.
She said she wasn’t in a position to take on any extra employees because of the high costs in running a salon.
“Commercial rates can very depending on the size of a salon and rates are generally higher in a big salon. I also pay management fees. The margins in running a hairdressers are very tight.
“I would welcome a reduction in commercial and water rates. Most hair salons have reduced prices and are doing special offers such as reductions early in the week to try and maintain business.
“In the last week running up to the Budget, people are very nervous about spending money until the cuts in payments and taxes are announced,” she said.  
Leah Kelly of Leah Kelly Hair Designs, Gort, agrees margins for hairdressers are very tight when commercial rates, water charges, taxes like VAT and other stealth taxes are taken into account.
Ms Kelly pointed out she had to pay €150 annually to the IMRO to allow her use background music in her salon.
“There are a lot of hidden costs running a hair salon. People are worried about what is going to happen after the Budget. I would like to be able to take on my current part-time employee on a full-time basis but I can’t afford to at the moment. I just have to work harder.
“If costs were reduced for small businesses they would be able to hire more employees, which would reduce unemployment,” she said.