Part of the ISME offer is that we give training and business guidance to our members (we’re currently on a roadshow around the four corners of the country promoting government supports for SMEs – why us? – well someone has to do it!). Giving the best advice to members means we cogitate on many, many thousands of words, both written and spoken, about the economy and their impact on small enterprises.
Tax incentives have been important
Yesterday on the radio we listened to a sensible academic from the University of Limerick who was asked about US President Obama’s new tax proposals and what they could mean for Ireland. She said that, if passed, they could mean bad news for Ireland. Then she added helpfully that it’s not a good idea to base an economy on tax incentives. But what she left out was that since 1960, much of our economic strength can be put down directly to those incentives. So we’ve actually had 50 years plus of benefits from the strategy.
Government crucifies small enterprise owners
But far more importantly was she also forgot to mention that the emphasis on foreign companies’ tax breaks has meant a continuous neglect of indigenous enterprise. We need both sectors but why, oh why, must the government continue to penalise small enterprises? For those not familiar with how unfair things are, see ISME’s tax equity document here.
Thankfully some people are listening
In a commentary in this morning’s Irish Times another sensible economist, John FitzGerald, wrote an article headlined, ‘Home-grown business driving recovery’. The entire is worth reading but here are some extracts;
He wrote, “However, the publicity about new investment by multinationals may be overemphasising their impact on the economy in the current recovery, and underplaying the very important role that indigenous Irish business is playing…
…Last month, IDA Ireland and Enterprise Ireland published their job creation data for 2014...which means that less than one-quarter of the net increase in jobs came from foreign-owned firms. The rest of the net jobs created in the economy occurred in Irish-owned businesses. This success in the current economic recovery bodes well.”
…The role of Irish firms in growing the economy needs fostering. It is not that Ireland does not need multinational investment; it most certainly does. However, Ireland also needs to wean itself off its dependence on the multinational sector for growth...
…In the longer term, Ireland needs to evolve its industrial strategy to reduce its dependence on low tax rates as the crucial arm of competitiveness. Greater reliance on innovation by domestic business and on developing skills and expertise will provide a more secure long-term strategy...