Wednesday, August 27 15:19:27
A Small Firms Association delegation met with Minister for Business and Employment, Gerald Nash, today to set out the small business priorities for his new role.
SFA Chairman, AJ Noonan emphasised the key role of smaller firms in Ireland's nascent recovery.
"The small business sector currently employs half the private sector workforce, some 700,000 people. Whilst an economic recovery is starting to take hold, many small businesses are just getting back on their feet, and their balance sheets remain challenged after 6 years of recession. In order to secure the recovery and set small businesses on a path to growth, it is essential that competitiveness issues are prioritised in Government," he said.
Irish labour costs are now 30.8pc more than our nearest competitor, the UK, 16pc more than the EU average and 11th highest in Europe, Mr Noonan pointed out.
"This is putting us at a distinct competitive disadvantage, and is a particular problem for SMEs in the services sector where the cost of employing an individual accounts for over 80pc of location sensitive business costs (i.e. costs which vary by location rather than being set by a worldwide market). Government changes in PRSI, illness benefit, redundancy rebate, health insurance and general taxation all impact negatively. No further costs can be imposed through Budget 2015," he said.
Noonan further commented to the Minister: "It is entirely premature to be talking about across the board wage increases, which small businesses can ill-afford and which would destabilise the Government's job creation targets. Whilst much talk has been made about a Low Pay Commission, the fact is that even with the 3pc increase in the UK National Minimum Wage from October 2014, it will still only be the equivalent of E8.17 per hour, compared to our existing high rate of E8.65 per hour. We are opposed to any increase in the statutory minimum wage and mandatory sick pay or pension provision, which would have a devastating impact on the fragile recovery that is taking place in small firm employment."
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