In advance of next week’s Budget, there are a couple of issues that need to be highlighted this week.
Firstly, the timing of the Budget is tough. Christmas time is the big spend time. As I said last week traditionally we spend more in the run up to Christmas than we do at any other time of the year. But facing into yet another austerity budget, the general public is afraid to spend, afraid of what is around the corner. There is a school of thought that would push the Budget out until spring…and at least let people make the festivities festive….
On a positive note it was encouraging to hear the announcement by AIB of a new initiative to speed up SME loan decisions up to €25,000 for its customers. This new process can act as a spur to small business lending. It is essential that small business owners are aware of all the schemes on offer to provide much needed funding. The devolution of authority to approve such loans back to local branches is a welcome return. Small businesses should not be afraid to approach their banks, to pro-actively apply for credit. If they are unsuccessful, they can appeal through the banks’ internal procedures or through the Credit Review Office. Galway Chamber’s recent publication ‘Navigating the Business Maze’ is available on our website www.galwaychamber.com.
Back to the Budget, the Galway Chamber Pre Budget Submission was made to the Minister under eight different headings but the overarching message was that any increase in the costs of employment would be fatal.
Two key items are employers PRSI and responsibility for sick pay. We have urged Government that there must be no increase in the share of PRSI paid by employers and that there must be no transfer of the responsibility for sick pay on to employers.
If Government chooses to raise taxes and increase the costs of employment next week, make no mistake, there will be a range of negative consequences including that businesses will have less confidence, their profitability will be reduced, they will be much less likely to be in a position to take on new staff and ultimately it will lead to job losses. This is the last thing we want. Any such increases would harm many of the Government’s own policy priorities and stated aims, such as job creation, cutting public spending and stimulating economic recovery. Such increases would impact negatively on the Government’s ‘Action Plan for Jobs’.
At a time when consumer demand and confidence is at exceptionally low levels in Ireland, business here and small businesses in particular simply cannot cope with additional costs. Cost competitiveness and the restoration of cost competitiveness is key to any economic recovery. If, as businesses, we are to compete successfully for business in international markets, then cost competitiveness is one of the most important items to achieving success.
Business After Hours
December’s Business After Hours Networking event, tomorrow evening, Thursday 29 November, will be a special Christmas themed evening at the Carlton Hotel, Dublin Road when the hotel will launch its special Christmas Ice Rink. All are welcome. RSVP email@example.com or 091- 563536.