Budget 2018 must protect employment in the SME sector
Capital expenditure must take priority over increasing current expenditure
ISME, the Irish Small and Medium Enterprises Association, today (31st July) presented its pre-budget submission to Minister for Finance Paschal Donohoe, T.D. The Association outlines its top five priorities; calling on the Government to adopt a budget that is pro-jobs and pro-enterprise in light of external challenges to the economy.
Speaking at the launch of the submission ISME Chief Executive Neil McDonnell said“Ireland remains a highly indebted country, in a global environment that presents many economic threats. Our real wealth, measured by GNI*, is 30% below the GDP figures we have been using for years to justify public expenditure figures.”
Our priorities for budget 2018 are:
Reduction in the punitive 23% VAT rate to 21%. Preferential VAT rates should be used to encourage the uptake of green, low-carbon technologies for transportation, lighting and heating.
Spending on infrastructure needs to increase. The State needs to prioritise water provision, the National Broadband plan, the completion of the M20 between Cork and Limerick, the rapid provision of affordable housing, and improved public transport. We should target infrastructure at 4% of GNI*. Capital expenditure must take priority over increasing current expenditure.
Our Capital Gains Tax (CGT) and Inheritance Tax regimes must be updated, both to increase yield, and to encourage more intensive use of assets.
Our business start-up and entrepreneurial reliefs must be updated, to encourage the formation of new businesses, and to encourage entrepreneurs to scale those businesses before sale.
Our further education and training regime is not consistent with activating a bigger workforce, or training the unskilled. Ireland’s performance on NEETs (not in Employment, Education or Training) is markedly worse than the OECD average. We must divert spending from non-performing programs towards those which will expand our workforce in size, learning and expertise.
“This Government must act prudently and sensibly in these challenging times. Greater investment in our infrastructure, reduction in VAT and investment in our training/skills programmes will enable our economy to deal with the challenges and opportunities presented by Brexit.” Concluded McDonnell