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Business unhappy with Govt's performance

Friday, October 19 11:47:57

Irish small and medium sized business owners are becoming increasingly unhappy with the Government's performance, especially in the areas of business costs and banking, the latest survey from ISME reveals.

The survey points to the dissatisfaction with the government's performance in the areas of jobs, banking, business costs and dealing with the Troika and the combined dissatisfaction rating of -62, down from -55 in summer '12.

The satisfaction rating on the Government's Jobs initiatives has continued to decrease from -60 to -66. This is despite the recent jobs announcements but reflects the general fears and discontent surrounding the threat of a mandatory sick pay regime and a potential increase in PRSI, in the upcoming budget, having a negative effect on sentiment. From an SME perspective the 'Action Plan for Jobs' is not working.

The slight improvement in the previous quarter in the satisfaction rating on how the government is handling the ongoing banking crisis has been reversed, down to a -73 from -71. By far the highest negative score of 'Very Dissatisfied' was scored in this category at -51. Micro and small businesses score -75 and -72 respectively, while the larger medium sized enterprises score -66, clearly showing the rescued banks negative bias towards the smaller firms.

It is hoped that the long awaited Micro Finance scheme and the Partial Guarantee scheme will make some positive difference to the availability of bank credit to the SME sector.

For the third quarter in a row the government's handling of business costs was the most negative response in this autumn survey at -76, a deterioration from the -70 scored in summer. Businesses employing between 10 and 50 were the most dissatisfied at -80, while micro enterprises scored a -74. The constant creep of government influenced business costs continues to negatively affect business performance, profitability and sentiment. The recent inflation figures aptly demonstrate the cost increases, with annual increases in gas of 18pc, electricity 9pc and diesel 13pc. While businesses have reduced their cost base in line with the reduction in consumer demand, the message has not got to the administration, which continues to allow energy, transport and a raft of local charges to increase.

In addition, the Government's missed target on the enactment of the Legal Services Bill adds to the dissatisfaction as legal costs are among the highest in comparator groups and must be reduced, despite opposition from vested interests in the legal sector.

Commenting on today's survey, ISME CEO, Mark Fielding stated that "the clear dissatisfaction ratings from hard pressed owners and managers of SMEs must alert this government to their under-achievement since taking office. They must tackle the key issues of costs, jobs and access to finance and prioritise the restoration of our competitiveness by addressing public sector costs, exposing sheltered sectors to greater competition and achieving greater access to bank credit for SME business. How the government addresses these issues will determine their satisfaction rating, but more importantly will support and maintain our long term competitiveness and provide a foundation for sustainable economic growth".