JOBS GROWTH DEPENDS ON WAGE RESTRAINT

• Recovery stalling as a result of rash election promises on wages.
• SME Investment and recruitment decisions being delayed.

ISME, Wednesday 29^th April 2015 

ISME, the Irish Small & Medium Enterprise Association, gave a cautious welcome to the latest CSO Live Register figures released today, (29^th April) and warned against any attempt by Government to buy the next election through premature reversal of Public Sector wage cuts. The Association drew attention to the ever increasing business costs which are slowing the recovery and called for greater focus on competitiveness.

According to the CSO there are now 349,500 people signing on the dole, a reduction of 1,800 in April and 45,008 in the last year. The standardised unemployment rate is stuck at 10%, which should be a warning to Government that the recovery is fragile and not running at the rate predicted by big business cheerleaders and government. In addition the worrying number of long-term claimants still account for 46.1% of the total.

Commenting, Mark Fielding, ISME CEO, said, “Small and medium enterprises are the bedrock on which real sustainable jobs are created and must be supported, at least, on an equal footing with FDI businesses. The temporary benefits of low interest, low euro and low oil could be reversed and it is therefore imperative that the business cost base is addressed”. 

“Continued calls for wage increases are a huge cause of concern for SMEs, already struggling to overcome rising costs and decreasing competitiveness. Job creation would be much more vibrant if the incessant wage increase chatter from pre-election politicians was stopped and more focus was placed on cost reduction across public and private sectors”. 

The main issues which should be addressed by Government are:

• Focus on cost competitiveness for the SME sector.
• Reduce government influenced business costs to below the EU average.
• 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.
• Expand the export capacity of the SME sector through soft supports.
• Attack the scourge of ever-increasing black economy activity. 

“Government must maintain focus on stability and growth, while staying within its spending targets. Loose pre-election pay promises must be stopped and every effort made to nurture the wealth and job creating SME sector through cost curtailment and focused incentives, resulting in a virtuous circle of jobs, welfare reduction and revenue increases”, concluded Fielding.

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