Use tax and welfare system to increase take-home pay.
Government must prioritise cost reduction to assist job creation.
ISME, the Irish Small and Medium Enterprises Association, welcomed the reduction in the monthly unemployment figures released by the CSO today (5th July) but warned that the slowdown in job creation was due to the effects of Brexit, industrial relations uncertainty and unwarranted wage pressure on SMEs. The Association highlighted that cost increases were leading to a pull-back in employment plans.
The CSO figures confirm the standardised unemployment rate has remained at 7.8%, with 169,100 people still signing on the dole, a reduction of 500 in the month.
Commenting on the figures ISME, CEO, Mark Fielding said, “the recent negative fluctuation of the euro vis a vis sterling shows how vulnerable the economy is to external factors and, once again, demonstrates the need to drive productivity as a sustainable defense to a more challenging external environment. The cornerstone of productivity and competitiveness is cost control and it is time that the Government became more involved in tackling the cost-creep across the business sector”.
“The tax and welfare system must be used to put money back into people’s pockets, rather than facilitating and promising further wage increases. The notion of pushing up wage costs at this juncture fails to recognise the business realities in what is still a very challenging economic environment for the SME sector.”
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.
“Every effort must be made to nurture the job creating SME sector through cost curtailment and focused incentives, resulting in a virtuous circle of jobs, welfare reduction and revenue increases”, concluded Fielding.