Tuesday, 31 December 2013
In an end of year statement, Chairman of the Small Firms Association, AJ Noonan has said “we would all acknowledge that this has be a very difficult time for small business, with entrepreneurship undergoing reassessment. However, 2014 must place small businesses at the heart of economic policy. Small businesses are the drivers of innovation and a permanent source of employment and economic progress.”
“Despite the horrendous impact in the years since 2008, there are still 200,000 small firms in Ireland, employing 655,000 people and 13,000 new businesses being set up each year. Entrepreneurship is alive and well, but must be nurtured and developed with a renewed focus from both agencies and government.”
According to Noonan, “tackling unemployment remains a key challenge for Ireland, and this needs to be reflected in the measures to support SMEs. However, if both government and agencies are forthright in their ambition to create the environment where jobs can be created then they must do everything to reduce employment costs in 2014. When employment costs rise small firms are less likely to take on new staff.”
Noonan stated that Ireland requires a tax system that should reward work and entrepreneurship and called on government to tackle the social welfare trap.
“Ireland now has one of the highest marginal tax rates in the OECD. The marginal tax rate of 55% for self employed at average earnings is well above the OECD average of 36%. These levels of tax rates are unusual across OECD countries and it is an obstacle for entrepreneurs and business start ups.”
Noonan added that Ireland needs a social welfare system that is fit for purpose that supports people well in the first few months after they have lost their jobs, and then reduces their payments substantially in order to incentivise a return to work before they lapse into long-term unemployment.
"Ireland's small business sector is deeply embedded in the Irish economy; it is now time to put jobs and small business at the centre of everything. With the right environment small businesses in Ireland will generate 20,000 jobs in 2014,” stated Noonan.
To achieve this target Noonan puts forward the following three point plan:
1. Making SMEs and job creation the leit motif of government policy:
2. Increase credit availability to SMEs; create an Investment Bank that will provide funding and ensure the current funding initiatives are functioning effectively:
3. Improved access for SMEs to public procurement contracts.
In conclusion Noonan stated, “If the government puts the right policies in place, this vital sector will drive growth in the wider economy, more so than any other. The small business sector given the right economic conditions will generate the growth needed to create jobs and overcome our debt burden. Small business can lead the way in helping Ireland to recover faster and stronger.”
For interviews, please contact: AJ Noonan, SFA Chairman at Tel: 086-2592610
Note: The Small Firms Association (SFA) is the national organisation exclusively representing the needs of small enterprises (i.e. those employing less than 50 employees) in Ireland. The organisation works with government and policy makers nationally and internationally, to ensure that the economic environment is conducive to small business establishment and development.