ISME Pre-Budget Submission 2021
Last year, ISME themed its Pre-Budget Submission ‘Preparing for Squally Seas,’ because of a confluence of macro-economic factors. While no one could have foreseen a global recession sparked by governmental fiat due to a viral pandemic, the reasons behind ISME’s fiscal conservatism were clear: we always must be ready to tackle the unexpected.
ISME calls on Government to loosen the purse-strings now for the same reason we have called for fiscal prudence for the last three years. Governments must act in the long-term good of the citizens and must spend counter-cyclically. Now, we must spend.
Our budget priorities remain little changed from last year, and are as follows for Budget 2021:
- Extend fiscal life-support to SMEs through targeted, grant-based liquidity supports.
- Implement in full the 20 key tax recommendations made by the Irish Tax Institute.
- Make permanent the temporary reduction in the punitive 23% VAT rate to 21%.
- Our taxes on property, commercial rates and LPT, need to be reformed.
- While spending on infrastructure is now at the levels we have previously sought, we are concerned about value for money, particularly on the National Broadband Plan.
- Our inheritance Tax regime must be reformed to incentivise the scaling up rather than sale of family businesses.
- Government continues to ignore the reports by the Irish Fiscal Advisory Council (IFAC). In view of where the global economic cycle is at present, this is a matter of concern.
- Our further education and training regime is inconsistent with activating a bigger workforce, or training the unskilled. We also acknowledge that our domestic SME base requires extensive training to improve its productivity. This should be incentivised via the tax system like the Teagasc ‘Green Cert.’