What has changed?

  • No substantial change in brief with most of enterprise policy staying within the Department of Jobs Enterprise and Innovation.
  • There is a new Minister appointed – Mary Mitchell O’Connor, TD (FG).
  • The successful ‘Action Plan for Jobs’ (APJ) format of policy making will be continued along with the regional action plans and a new element – county level jobs targets.

Positives for business

  • Positive outlook on overall business tax with a commitment to maintain the 12.5% corporation tax rate and engage with BEPS.
  • Several Ibec suggestions on reform of the taxation of entrepreneurs have made it into the draft programme including:  A reduced 10% CGT rate for new start-ups and expansion of the EITC for the self-employed and a commitment to explore options for an employee share options scheme for SMEs
  • For business in the regions there are commitments on funding for Western Development Commission, including an extension of its remit to include the North West, and regional capital funding for LEADER, Údarás, LEOs, Enterprise Ireland and the IDA.
  • The programme also suggests investigating the possibility of community banking through post offices and credit unions.
  • Commitment to introduce a PRSI scheme for the self-employed.
  • Commitment to step up the use of impact assessments across Government.
  • Ibec welcomes the commitment to progressively increase funding to the arts, including the Arts Council and the Irish Film Board, as the economy improves.
  • Government will conduct a consultation on the merits of establishing a Procurement Ombudsman. If implemented, this would be a low-cost and effective alternative appeals mechanism to the High Court.

 Outstanding issues and missed opportunities

  • Although the continuation of the APJ format is welcome, it is primarily a short term initiative. The programme is missing a long term plan for economic growth centred on a new national growth commission and is therefore lacking in real vision.
  • Although there is a commitment to new non-bank forms of credit within the document this part is short on detail. Government must improve the attractiveness of measures which support funding for small businesses.
  • Key schemes include the Employment Investment Incentive Scheme and the R&D Tax Credit. In addition the introduction of a Seed Enterprise Investment Scheme (SEIS) would encourage investment in small and start-up businesses.
  • The programme supports an increase in the minimum wage to €10.50 per hour over the next five years. This would be equivalent to just over 2.5% per annum. Increases must be competitive, affordable and appropriate while taking the cost of living into account.
  • Despite a general commitment to provide a supportive tax regime for entrepreneurs and the self-employed, there was no specific mention of the 3% surcharge for self-employed incomes over €100,000, which is one of the main areas of discrimination against entrepreneurs and the self-employed in the tax system.
  • The initiatives aimed at improving access to public procurement for smallerbusinesses fail to distinguish between small and medium size enterprises. The crux of the problem relates to small firms (<50 employees) accessing public contracts, and grouping these companies with medium businesses (51-250 employees) conceals the scale of the problem and hampers efforts to design targeted solutions.
  • No reference to the restoration of the redundancy rebate – a key measure which previously gave small businesses the confidence to take on staff.
  • There is no mention of Innovation 2020, Ireland’s new strategy for research and development in science and technology. This strategy needs to be fully implemented if Government is serious about building a smart, sustainable and competitive economy.

Contact Aidan Sweeney, enterprise and regulation policy at aidan.sweeney@ibec.ie
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