Ibec calls for change as 80% of firms lack Brexit readiness
Lingering uncertainty surrounding Brexit is hampering the future planning processes of nearly 80% of companies on the island of Ireland, according to a new report, writes
While the results of its latest quarterly business monitor suggest little negative impact to date from the Brexit confusion, cross-border business development agency InterTrade Ireland has warned companies they need to be more prepared.
“It is essential Irish SMEs start to prepare and plan for the outcome of the Brexit negotiations. InterTrade Ireland is encouraging all businesses to plan, act, and engage for every potential outcome,” said the agency’s strategy and policy director Aidan Gough.
According to InterTrade Ireland, only 3% of Irish export-orientated companies have a fixed plan for trading in a post-Brexit environment.
“While we recognise the pressures facing small businesses — particularly as owners can be focused on the here-and-now — there is, nevertheless, a window of opportunity. This must now be grasped to prepare for the challenges and indeed the opportunities that will be presented by any new cross-border trade arrangements which may emerge over the coming years.
“Every firm operating on a cross-border basis, or with ambitions to grow, should plan, act, and engage today. This is the key to ongoing stability and success,” Mr Gough added.
That said, InterTrade’s latest survey showed what it called “remarkable” stability in the second quarter, with a record 56% of respondent firms describing their current position as “stable”, 48% reporting sales growth and 17% increasing employee numbers in the three months to the end of June.
Meanwhile, Ibec has called on the new Finance, Public Expenditure and Reform Minister, Paschal Donohoe to adopt a “more sensible” fiscal policy to support investment and productivity. In a detailed ‘wish-list’ document, targeting every department within new Taoiseach Leo Varadkar’s cabinet, the employers’ body said a more level playing field is needed regarding Ireland’s business tax offering for indigenous companies.
“This is in the context of a raised possibility of Irish SMEs servicing the UK market from within because of potential trade restrictions post-Brexit, and the more preferable tax treatment of SMEs in the UK,” it said.
Last month, in its pre-budget submission, Ibec suggested Mr Donohoe was operating under artificial fiscal constraints and could have €7bn more to play with over the next four years, including €400m with which to cut personal taxes and improve infrastructure in October’s budget.
“More than 98% of Irish firms employ fewer than 20 people, with these companies employing 44% of the workforce.
“Unfortunately, entrepreneurs and the self-employed are subject to more onerous tax treatment than employees. In order to create a truly entrepreneurial culture, and rise to the competitiveness challenges posed by Brexit, this must change,” Ibec said regarding its call for an enhanced tax policy to better support Irish entrepreneurship and SMEs in its latest document.
Ibec also urged Trade and Foreign Affairs Minister Simon Coveney to continue to pave the way for access to key overseas markets for Irish exporters; protect Ireland’s international reputation; promote continued investment and ultimately safeguard Ireland’s position in the EU.
“In a challenging global environment, the European Commission has launched several papers, and intends to launch more, to generate a discussion both between and within member states on the future of the EU. It is critical to our competitiveness that this does not lead to a two-tier Europe that disadvantages Ireland,” it said.
Meanwhile, Housing, Planning and Local Government Minister Eoghan Murphy is urged to overhaul the national planning framework, creating a vision for “making our major cities more liveable, for revitalising regional towns, and for targetted infrastructure investment in the regions”.
Bureaucratic barriers to infrastructural development must be tackled, Ibec added.
