ISME chairman calls for parity of esteem between FDI and SME sectors.
Competitiveness the key to sustained economic progress.
Address by ISME chairman, Eamonn Kielty, at the Association's Annual Conference 2013.
Addressing the 460 delegates at ISME, the Irish Small and Medium Enterprises Association’s Annual Conference, held in the RDS, today (Friday 8th November), Chairman Eamonn Kielty, called for a much more pro-active SME focussed government initiative to reboot domestic demand, improve competitiveness and reduce the structural costs of business. “If we are to regain our competitiveness and initiate growth, we must have an environment that facilitates and fosters enterprise, not only in the FDI space but, just as importantly, in the SME sector,” he said.
The ISME chairman congratulated the many thousands of small and medium businesses who have weathered the storm of the last seven years. The resilience and determination of SMEs is starting to win through despite the harsh economic headwinds. However, he warned against any premature celebration as Ireland exits the Troika bailout and called for innovative initiatives in public sector costs, bank lending and public procurement.
Making reference to the ongoing economic crisis and the pivotal contribution of SMEs, Kielty outlined, “Ireland would not be preparing to exit the bailout at the end of this year if it had not been for the sheer hard work and courage of SME owner-managers throughout the crisis. SMEs are the cornerstone of this economy and yet our needs are continuously ignored by a government that allows high business costs to prohibit opportunities for owner-managers to create employment.
“The Government has been running a massive deficit for the last five years. That deficit is the cost of Social Welfare and the cost of running the public sector. Both of which we cannot afford at their current rates and must be cut. It is the private sector, in the main, that funds the public servants who have terms and conditions of employment that are the envy of the rest of society. In comparison, the private sector has already experienced wage cuts, together with suffering thousands of job losses and company closures. This administration must tackle the public sector costs that are crippling private enterprise through cut-backs and taxes”.
On bank lending, Mr Kielty repeated the long standing ISME call for a Development Fund for the wealth generating SME sector, which would bring some competition into the dangerously concentrated market.“A normal competitive banking market no longer exists in Ireland and currently the banks are primarily concerned with self-preservation and deleveraging. As foreign banks exit stage left, the remaining bailed-out two will no doubt take advantage of the lack of competition to hike up their charges. The Government must ensure that steps are taken by the Central Bank to protect small business from the gouging usually associated with Irish banks and now more especially due to the dearth of competition”.
The ISME Chairman berated the Government for allowing SMEs to be constructively dumped from the public procurement process, “Public procurement is an important source of business for SMEs and the tragic irony is that by government’s dogged pursuit of lower prices, the smaller business is being excluded from the process, putting SMEs and their employees at risk. By its action, this Government demonstrates that it knows the price of everything and the value of very little”.
“Our government must rethink its stance on procurement. It must recognise that decisions must take long term national economic interest into account. The law of comparative advantage is not infallible, and few Irish citizens will applaud the Irish Government for resolutely following it, while Ireland’s small and medium enterprises go to the wall.”
“We need to change Ireland from a dependent to a self-reliant society—from a give-it-to-me, to a do-it-yourself nation; from a sit-back-and-wait-for-it to a get-up-and-go Ireland. This means continuing to nurture an enterprise culture which accords a status to the entrepreneur and offers the rewards to match, breeding a new generation who create jobs for others instead of waiting for others to create jobs for them”, he concluded.