ISME 2007 Press Releases

ISME’s END OF YEAR STATEMENT 2007

• 2007 – A difficult year for small business.
• Economic uncertainty the major influence on business performance.
• Competitiveness undermined by savage cost environment.
• External factors such as Euro exchange rate, interest rates and rising oil prices affecting market uncertainty.
• Higher costs including labour and energy set to undermine small business competitiveness and viability over the next 12 months.
• Manufacturing and Construction under particular pressure.
• Further pain expected in 2008 as companies restructure.
• Moderate wage increases a priority.
• Ireland’s corporate state needs to be infused with fresh and radical thinking of small business, currently lacking in the Partnership process

ABSENTEEISM COSTING SMALL BUSINESS €1.1 BILLION ANNUALLY

• 8 million days lost due to employees\\\\\\\' non-attendance at work.
• Over 60% of all absenteeism due to feigned illness and malingering.
• Electrical/Precision Equipment and Transport industries worst offenders, with Retail absenteeism lowest.
• The highest level of absence was recorded in Munster, with Ulster recording the lowest.
• Back to work interviews shown to reduce malingering by as much as 55%.

PUBLICATION

• Downward trend in business confidence an ongoing concern
• Unsurprisingly the Construction Sector remains the least positive.
• Mixed signals on employment front as many sectors plan increase in job numbers but at a slower rate.
• Sharp reduction in manufacturing employment worrying.
• Difficult 2008 predicted as the cold winds of economic uncertainty start to bite.
• Not all doom and gloom though as exports up and investment levels continue to grow apace.
• Wage restraint essential to ensure that employment prospects are met.

BLEAK END TO YEAR AS INFLATION REMAINS STUBBORNLY HIGH

• ISME concerned at ‘lack of action’ to address ‘out of control’ cost environment.
• Reduction in inflation imperative as National Wage Negotiations loom.
• Actions not words needed to address public expenditure.

MAJOR SURVEY CONFIRMS THAT SMEs UNHAPPY WITH BUDGET 2008

• Only 1 in 5 SMEs expect that Budget 2008 will have a positive impact on their business.
• Over half of businesses confirm that the Budget failed to meet their expectations.
• Specific measures for small business seen as a non-event, with 73% of respondents expecting no positive effect on their business.
• 53% of respondents expect that reform of stamp duty should have a positive impact on the economy
• While 41% stated that the proposed VRT and motor tax reform would negatively impact on their business, 68% of SMEs indicated that they were happy overall with the environmental changes introduced.
• The decision to double the stamp duty on cheques shows lack of understanding of the SME payments market.

TIGHT BUDGET PROVIDES LITTLE IMPETUS TO SMALL BUSINESS

• Opportunity lost to promote Enterprise.
• Stamp duty reform welcomed.
• Inflation threat still exists as measures fail to address cost environment.

ISME CALLS FOR POLITICAL “TALLAGHT STRATEGY” TO HALT BENCHMARKING

• Strong national leadership required to tackle public sector avarice
• Benchmarking sham exposed by pay & performance differentials.
• Public sector remuneration 69% above Private sector.
• ISME Chief calls for “productivity increases before pay increases”.
• Economy cannot afford another crippling ’wage round’.

ISME SLAMS CUSTOMS & EXCISE AUTHORITY FOR ‘BLIND-EYE’ APPROACH TO FOREIGN SHOPPING SPREES

• Over €1billion lost to the local economy due to foreign spending frenzy.
• Taxes foregone exceeds €300m.
• Local businesses lose out as stampede to foreign destinations continue.

RECORD CHRISTMAS SPEND SHOULD BENEFIT
LOCAL ECONOMY

Spending of €4.2bn anticipated in the lead up to Christmas.
• Record spending should provide impetus to local economies.
• Buy Irish would help to create and secure Irish jobs and provide a boost to Irish Manufacturers, Producers and Retailers after a difficult year.

ISME CALLS FOR SUSPENSION OF DUBLIN BUS DISPUTE

• Concern at escalation of dispute, disruption caused and cost to economy and business community.
• Dublin commuters and business ‘held to ransom’.
• Calls on Government to open bus corridors to all traffic in an attempt to relieve serious congestion.

INFLATION

• ISME slams Government’s impotent Inflation Policies.
• The real threat to Irish Economy comes from State influenced costs, which are continuing to drive the headline inflation rate.
• Public Sector costs and Local charges are main culprits.
• Upcoming Budget must address Government influenced costs to ensure that perceived economic uncertainty does not undermine business confidence.
• ISME demands an embargo on all Public Sector recruitment for one year to give unsheltered economy a respite from resultant increased taxes.

ISME DEMANDS INCREASE IN MILEAGE ALLOWANCE IN LIGHT OF INCREASE IN MOTOR FUEL

• rease in motor fuel prices since beginning of year.
• Employee Motor Rate Allowance falling way behind cost of running vehicle.
• Cost of increased allowance can be offset against Increasing Government tax take on fuel.

ISME URGES CONSUMERS AND RETAILERS TO
BUY QUALITY IRISH THIS CHRISTMAS

• Spending of €5.52bn anticipated in the lead up to Christmas.
• Buy Irish would help to create and secure Irish jobs and provide a boost to Irish Manufacturers and Producers after a difficult year.
• ISME calls on Multiples to stock more Irish products over the Christmas period.
• Jobs on the line as Food Imports increase dramatically in last two years.

ISME CHIEF SLAMS HUGE PAYOUTS BY REVIEW BODY

• Headline increase sends totally wrong message.
• Wage moderation in the rest of the economy essential to maintain competitiveness and jobs.
• ‘Do as I say, not as I do’ applied in this case as Ministers set to except extraordinary increases.
• Private sector fears knock-on impact on benchmarking 2 as a consequence of latest hikes.
• ISME calls on the Government to invoke an ‘inability to pay clause’ and invest the projected €16m in developing and promoting new business, thereby ensuring a better long term return to the Economy.

SMALL BUSINESS CONCERNED AT DRIVE-ALONE BAN

• Reports of employees not able to attend work due to short notice
• Short lead in time to cause chaos, particularly in rural areas.
• No cognisance taken at ridiculously long wait for driving tests.
• ISME calls for outright ban to be deferred until the New Year.

ADDRESS BY ISME CHAIRMAN, J.J. KILLIAN AT THE ASSOCIATIONS ANNUAL CONFERENCE, FRIDAY 19th OCTOBER 2007

• ISME Chairman outlines that infrastructure in Ireland is seriously lagging other first world economies and hindering economic development in the process.
• “Some done a lot more to do,” says Killian
• Traffic congestion costing business €2.5billion annually
• Lack of proper management leading to inefficient implementation and delivery of key infrastructure projects.
• Increased emphasis on rail a priority in economic regional development.
• Waste management a disaster in the making with lack of competitively priced and secure waste management options.
• ISME calls for the introduction of a National Transport Management Agency to oversee the delivery of efficient traffic flow on roads both nationally and locally.

ISME PRE-BUDGET SUBMISSION

• Restoring Irish competitiveness and rewarding enterprise should be key priorities in formulating Budget 2008.
• Tackling current government expenditure and public sector pay should also be high on the agenda.
• PAYE allowances should be scrapped and replaced with a doubling of the personal tax credit. This is to off-set the current discrimination that does not allow company directors or the self-employed to claim PAYE allowances.
• ISME calls for reduction in employers PRSI to 10% from the current rate of 10.75%.
• A National Transport Management Agency should be introduced to oversee the implementation and efficient delivery of all major infrastructure projects and management of existing infrastructure to ensure that what is currently in place is utilised fully and efficiently.
• Water charges should be extended to include domestic households.

INFLATION

• ISME welcomes reduction but warns against complacency in battle to eradicate inflation.


• Increases of 10% plus still recorded for key business inputs.


• Upcoming Budget must address Government influenced costs to ensure that perceived economic uncertainty does not undermine business confidence.

PUBLICATION OF ISME’s THIRD QUARTERLY BUSINESS TRENDS SURVEY AUTUMN 2007

• Sharp decline in business confidence a cause for concern.


• Lack of confidence in economic conditions however not replicated at individual level with businesses relatively upbeat about their own potential and performance.


• Economic uncertainty and erosion of competitiveness identified as main business concerns.


• Mixed bag on employment front, but prospects remain positive.


• SMEs willing to increase investment and employment if proper economic conditions exist.


• Budget 2008 provides the opportunity to restore confidence in the economy.

ISME WARNS BANKING SECTOR AGAINST THREATENED INTEREST RATE INCREASE

• Cost of lending to SMEs already 34% higher than European Average.


• Lack of competition in business banking exposed by interest rate threat.


• Irish small business continues to pay a heavy price for their banking relationship due to abuse of dominance.

ADMINISTRATIVE BUREAUCRACY & RED TAPE STIFLING SMALL BUSINESS: ADDRESS BY ISME CHIEF EXECUTIVE MARK FIELDING AT THE ISME BUSINESS NETWORK BRIEFING SESSION IN CORK.

• Strangulation by regulation stifling growth, reducing competitiveness and costing Ireland jobs.



• Compliance with Government regulatory requirements imposes real additional costs of thousands of Euro on business, particularly on small firms and ‘new starters’.


• They are a barrier to market entry and a significant impediment to business expansion.


• Red Tape adds the equivalent of 4% of turnover in costs.


• ISME calls for the immediate introduction of the Standard Cost Model of administrative burden reduction which has saved millions across Europe.

INFLATION

• Government inaction on inflation leading to a drop in business confidence.


• Budget 2008 must tackle out of control inflation “head on”.

ISME WELCOMES REDUCTION IN ELECTRICITY COSTS FOR SMEs

• The reduction represents a long overdue respite to many businesses who have suffered due to exorbitant energy costs.


• Winter of discontent avoided with regard to energy costs.


• ISME looks forward to further reductions in the near future

ISME TO HOST NATIONWIDE BUSINESS BRIEFING SESSSIONS FOR SMALL BUSINESS

• Briefings to highlight ways of saving costs and other important business issues for small companies.

ISME WELCOMES APPROVAL BY EUROPEAN COMMISSION FOR EXTENSION OF BES AND SEED CAPITAL SCHEMES

ISME CONCERNED BY IMPACT ON SMALL LOCAL SUPPLIERS DUE TO OVER-RELIANCE ON IMPORTED FOOD PRODUCTS

• Empty shelves in Ireland during UK Foot and Mouth scare confirm over-reliance on imported foodstuffs.


• The level of imported foodstuffs from the UK and Germany in particular has increased dramatically in the last two years, rising by 17% and 57% respectively.


• ISME calls on increased emphasis and support for local suppliers.

PUBLIC SECTOR TENDERING BIAS AGAINST SMALL BUSINESS

• SMEs losing out on opportunity to tender for Government contracts worth millions.


• Bureaucracy and red tape squeezing small business out of tendering process.


• Survey results confirm that one-third of SMEs ‘put off’ tendering due to complexity.


• Lack of competition leading to bad value for money at taxpayers’ expense.


• Radical overhaul of public tendering required.

INFLATION

• Less waffle more action required to address inflation crisis


• Government action on public sector costs required to reduce “home grown” inflation.

GROWING BLACK ECONOMY PUTS SMALL BUSINESS UNDER THREAT, COSTING THE STATE BILLIONS IN LOST REVENUE

• Increasing Black Economy activity posing a serious threat to business and the economy.


• Over €16 billion equating to €300m per week being lost to the black economy.


• €3.2billion tax revenue foregone due to black economy.


• Legitimate businesses being undercut by rogue operators.


• ISME calls for Government action to tackle the illegal activities of rogue operators, racketeers and others who participate in the black economy.

ABYSMAL PERFORMANCE OF PUBLIC SECTOR SLAMMED IN OECD SUBMISSION

• Massive increase in headcount and expenditure not reflected in improved service or delivery.


• Public sector inadequacies and inefficiencies negatively impacting on rest of society and the economy.


• Majority of SMEs report no improvement in public sector services in the last five years. In many instances the service has disimproved.


• ISME calls for increased public service accountability and independent measurement of performance through the immediate adoption of the Accruals System of accounting.


• Reckless and fraudulent trading provisions similar to those of the Companies Acts should be applied to conduct of Secretaries General of all Departments and CEOs of all State Agencies.

FORMER ISME CHAIRMAN DR.ROBERT BERNEY SELECTED ON EU ENTERPRISE POLICY GROUP.

LATE PAYMENT LEGISLATION HAS FAILED TO DELIVER FOR SMALL BUSINESS

• Late payments causing untold damage to small & medium business sector.


• Big business and State sector continue to put squeeze on smaller suppliers through ‘interest free’ credit.


• 32% of small companies waiting longer for payment compared to last year.


• Almost one quarter of companies experiencing payment delays of over three months.


• Small business waiting 61 days for payment


• 84% of companies want to see the introduction of mandatory 30 day credit period across the board.


• Current prompt payment legislation must be amended.


• ISME calls on the Government to introduce mandatory credit terms of 30 days as was initially intended by the Prompt Payment Legislation.

• Strong Government action rather than rhetoric needed to tackle ‘out of control’ cost environment.
• ISME slams Government’s failure to address the inflation problem.

PUBLICATION OF ISME’s SECOND QUARTERLY BUSINESS TRENDS SURVEY SUMMER 2007

• SME business optimism reflective of the general level of economic uncertainty that prevails.
• Mixed bag on the employment front but many companies still plan to create jobs over the next 12 months.
• Construction sector downbeat on future prospects as manufacturing employment increases.
• SMEs identify economic uncertainty and wage costs as their main concerns.
• Erosion of competitiveness, particularly in internationally traded services, leading to a sharp decline in export values in the last quarter.
• The cost environment, erosion of competitiveness and reforming the public sector key issues to be addressed by the government.

ISME WARNS OF SUBSTANTIAL KNOCK-ON CLAIMS AFTER LATEST HIKE IN MINIMUM WAGE

• 2ND Highest Minimum Wage in Europe creating false expectations.
• Labour intensive small business under increased pressure.
• Radical rethink required as national minimum wage a blunt instrument in tackling poverty.

SMALL BUSINESS CONCERNED AT INFLATION OUTLOOK

• Small business confidence undermined by uncertainty over future inflation levels.
• New Government should make tackling inflation its number one priority.
• Clear and decisive leadership essential in tackling inflation fiasco.

ISME WELCOMES THE PUBLICATION OF THE
‘SMALL BUSINESS IN IRELAND’ ANNUAL REPORT

IT’S THE PUBLIC SECTOR, STUPID!

• New Government must take responsibility for root and branch reform of Public Sector.
• Surreal two tier system of pay negotiation and Benchmarking must be radically overhauled.
• Efficient Public Sector is important component of our modern economy.
• Paying more for less work, a recipe for disaster.