Government urged to curb business costs
The Government must use the next budget to curb the cost of doing business while improving productivity, it was claimed today.
Employers federation IBEC warned Finance Minister Brian Cowen to take corrective measures or risk undermining Ireland’s ability to compete internationally and prosper.
In a submission ahead of Budget 2006, IBEC called on the minister to lift the cap on pensions contributions for one year to allow young people with maturing SSIAs to invest lump sums in a pension fund.
And they said the number of childcare places had to be greatly improved through more grants.
Turlough O’Sullivan, director general of the influential lobby group, said the state’s competitiveness had been dented.
“The task now is to curtail our costs, raise productivity in both the private and public sectors and so bring back to Ireland the competitive edge that delivered such prosperity in recent years,” he said.
“Business costs, including wages, have risen at rates well ahead of those in our main trading partners.
“This has severely dented our competitiveness and we see this in our poor export performance in recent years and the acceleration of job losses to lower cost economies.”
Figures from the Central Statistics Office highlighted the threat to business with 6,100 manufacturing jobs lost in the year to June, an average of 508 losses per month. Almost 20,000 jobs were lost in the manufacturing sector since 1999.
IBEC also warned the real value of net take-home pay must not be reduced by raising PRSI or indirect taxes or by failing to increase tax bands and tax credits in line with salary increases.
The body said inflation should not be allowed to creep up and must not fuel the costs of services to business provided by the public sector.
Mr O’Sullivan said that investment in research and development industries was needed. And he added that all employees irrespective of earnings should have the same incentive to contribute to pensions by improving tax credits.
IBEC outlined a raft of measures needed to encourage prosperity including,
:: Government should speed up and better co-ordinate the planning of public projects maintaining capital spending at a minimum of 5% of GNP.
:: Government should assist in raising productivity in the private sector by broadening the R&D tax credit scheme, improving other R&D schemes and by providing tax incentives for company training, and energyefficiency.
:: The number of child care places should be increased by improved availability of grants. Childcare supports provided by employers should not be subject to benefit-in-kind.
