• Cost competitiveness must be priority. • Unrealistic wage demands adding to uncertainty. • Complacent Government allowing costs to escalate.
ISME, Thursday 19th February 2015.
ISME, the Irish Small and Medium Enterprises Association, called on Government to prioritise the issue of rising business costs and to draw up a plan to tackle competitiveness issues. At the release of the latest CSO Inflation Figures today (19th February), the Association warned that cost curtailment across the economy was essential if Irish businesses were to compete internationally and create much needed jobs.
The annual CPI inflation figure was -0.6%, with January showing a rate of -0.8%.
ISME Chief Executive, Mark Fielding commented on the figures, “There has been much debate around the threat of deflation and the effect of quantitative easing, but the Government is ignoring the fact that business costs are continuously rising. These costs, many of them state-influenced, are a direct threat to jobs and economic recovery. Competitiveness is diminishing rather than improving but we are still not seeing any concerted effort from the Government to address this problem.”
“The incessant pay rise demands of unions, cheered on by re-election focussed politicians and seemingly condoned by semi-state and big business lobbyist IBEC, are fuelling wage pressures on SMEs. Many of those calling for wage increases ignore the fact that most SMEs are still struggling to stabilise after seven years of losses and simply cannot afford any more cost increases.”
The Association called on the Government to:
• Ensure that all state imposed business costs are benchmarked internationally.
• Reduce public sector costs by addressing the increments, perks and inefficiencies.
• Address energy, telecom, transport costs and exorbitant fees of the monopolistic legal profession.
• Reduce employer labour taxes to promote job creation.
“The low overall inflation rate seems to be a convenient excuse for Government to avoid dealing with business costs. However, these costs, disguised in the overall CPI figures, are rising and the capacity of the sector to deliver new jobs is being severely restricted”, concluded Fielding.