Tuesday, 28 July 2015
The SFA met with Minister Bruton on 28th July to discuss our ideas for inclusion in the Action Plan for Jobs 2016. Key issues discussed included the importance of the Government not doing anything that would increase the cost of employment (minimum wage, mandatory pensions), ideas to make entrepreneurship attractive and to increase the incentive to work, and ideas to improve the general business environment, including access to finance, public procurement and reducing business costs.
DON’T INCREASE THE COST OF EMPLOYMENT
Irish labour costs are 11th highest in Europe and 21% above the EU average. Total business costs are 25% lower in the UK than in Ireland. Government changes over the last number of years in PRSI, illness benefit, redundancy rebate, health insurance and general taxation have all impacted negatively and should be reviewed. We are opposed to any increase in the statutory minimum wage and mandatory pension or sick pay provision.
MAKE ENTREPRENEURSHIP ATTRACTIVE
- Capital Gains Tax – reduce CGT rate to 20% and amend CGT Entrepreneurial Relief to mirror the UK 10% scheme
- End the Discriminatory Treatment of Entrepreneurs & the Self-Employed. Incentivise more risk-takers setting up their own businesses through expiring the 3% USC surcharge for the self-employed as planned at end 2014; equalising the PAYE tax credit for proprietary directors and introducing voluntary PRSI contributions for self-employed to access social welfare benefits.
- Develop specific policy proposals on supporting second-chance entrepreneurship, after business failure.
MAKE WORK ATTRACTIVE
- Reduce the marginal tax rate by 1% and increase the entry point to the marginal rate by €1,500 in Budget 2016. End the 0.15% pensions levy as promise
- Maintain successful Jobs Plus and JobBridge schemes.
- Remove social welfare traps on recipients coming back to work and taking up additional hours. In particular amend the PRSI distortions for both businesses and employees identified in the Low Pay Commission report.
IMPROVE THE GENERAL BUSINESS ENVIRONMENT
- Access to Finance – Banks now say they need a 30% equity investment before making a loan. The State can improve equity capacity through enhancing the EIIS by broadening the criteria and rebranding. Support small companies in accessing financial expertise through introducing a Finance Voucher Scheme (similar to the Innovation Voucher scheme).
- Access to Public Procurement – ensure Circular 10/14 is implemented. Disaggregate contracts into smaller lots and by regions to ensure more small businesses can tender, etc.
- Reduce business costs, specifically commercial rates, regulatory burden, hidden economy.
- Support R&D by introducing an R&D Tax Credit Lite for Small Firms
- Improve consumer spending by extending the 9% special VAT rate; capping all other consumer taxes.