Irish SME’s – Just Small Talk?
It’s time to prioritise small Irish businesses and get Ireland working again
One of the most popular refrains by An Taoiseach Enda Kenny in the last two years has been that by 2016 Ireland will, viagra among other things, viagra be the best small country in the world to run a business. One can only assume that he is referring solely to Multi-National Corporations as this Government has continually failed to adequately protect and promote small businesses in Ireland.
The Government has, doctor to their credit, made huge strides in their quest to repair Ireland’s international reputation, set us on the right fiscal track and facilitate our move towards exiting the bailout programme. However domestic demand is still flat and despite recent statements from the Government, the unemployment crisis is showing no true signs of abating. There is now a whole cohort of Irish adults who, in the current climate, have little or no chance of gaining employment. Our construction sector will never again employ anywhere near the levels it did pre-2008 and those who were previously employed in this sector are unlikely to fill the new ‘knowledge economy’ jobs appearing due to increased FDI. The bricklayer is unlikely to become the software engineer. The only way to solve this issue is to create jobs in local economies through small business development. Affording small business owners and entrepreneurs the space and freedom to create extra jobs is the answer to increasing domestic demand and creating the low-skilled jobs Ireland so desperately needs.
This Government, however, has chosen instead to ignore the issues small businesses face and has seen fit to increase taxation on this segment while refusing to adequately reform our antiquated bankruptcy laws. Tax on the self-employed has increased by 8.5% since 2008, while still it takes 12 years to exit bankruptcy in Ireland. This is leading to a crushing fear of failure being instilled on Ireland’s potential entrepreneurs. This fear is made even worse by the fact that the PRSI contributions of the self-employed do not qualify them for job seekers benefit should the business fail.
In the run up to Budget 2013, all of the usual kite flying has occurred. The most worrying of these is Minister Burton’s statement regarding increasing PRSI on the self-employed. The self-employed in Ireland already have an effective tax rate of 55%. The reward for someone taking the sizeable risk of starting their own company and creating employment is to have over half of their income taken from them in taxes. This effectively stems any hope of businesses re-investing profits into the business. The idea of increasing PRSI on this segment, who by the way receives little to nothing for their PRSI contributions, is as idiotic as it is unfair.
The Government, and particularly Fine Gael, a party which claims to support small business, need to start supporting the Irish SME sector. This sector is one which is mostly likely to drive domestic demand and provide jobs for the thousands of unskilled unemployed. We must update our archaic and regressive bankruptcy laws to support innovation and risk-taking, rather than penalising failure. We should take the bold step in reducing the marginal tax on the self-employed. Such a move may not be popular across the entire electorate, but would increase the disposable income in the economy, promote domestic demand and most importantly create sustainable employment.