Government must prioritise cost reduction to assist job creation.
At the release of the Monthly Unemployment figures from the CSO today (31st May), ISME, the Irish Small and Medium Enterprises Association, welcomed the continuing reduction in the unemployment rate and encouraged the new Government to focus on the SME sector, where jobs growth is slower than expected. The Association called for a prioritisation of labour market participation initiatives to combat the still too high youth and long term unemployment figures.
The figures confirm the standardised unemployment rate is 7.8%, with 169,700 people still signing on the dole, a reduction of 1,500 in the month.
ISME CEO, Mark Fielding said "While the figures are welcome, we cannot be complacent as there are a number of pressures threatening business competitiveness. Foremost among these are wage demands, lack of access to finance, increased business costs, including insurance hikes of 30% plus and the lack of job-creating investment in infrastructure".
"The main worry for SME business is the uncertainty over the Government's ability to control public finances under threat from public sector wage demands. Any concessions from Government will immediately transfer over to the exposed private sector, affecting jobs and competitiveness. Our wage profile has been growing faster than the EU 28 in the last 2 years and needs to be curtailed."
The Association called on Government to:
Stand firm on pay demands and any resultant industrial action.
Reduce government influenced business costs to below the EU average.
Target capital investment in job rich infrastructure.
Encourage entrepreneurs through the tax system.
Ensure real measurable access to credit for viable SMEs.
Outsource more state sector services to SMEs.
Reform the social welfare system to make it more profitable to work.
Attack the scourge of ever-increasing black economy activity.
"It is essential that the reduction in unemployment continues which will boost consumer confidence and business investment. The job of government is to create the proper environment through the tax and social welfare system and proper control of the public finances. Cost curtailment and productivity will lead to an increase living standards for all", concluded Fielding.