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FOR THE FIRST time in many years, there is an aura of expectation surrounding the annual Budget. An expectation that Budget 2015 will signal the end of a litany of ‘austerity budgets’, and mark a new phase in Ireland’s economic recovery. Budget 2015 is being viewed by many as an opportunity for Ireland to build on the positive economic performance of 2014 and to make 2015 a watershed year in Ireland’s recovery. However risks still abound for a small, open economy such as ours and the uncertainty caused by global events completely outside our control cannot be ignored.
We believe that if Ireland’s recovery is to be truly successful, our economic growth must be sustainable, and it must be felt throughout the country. The most effective way of ensuring this is the case is by helping businesses, large and small, to create jobs.
Notwithstanding the positive trend in live register figures in recent quarters, the spectre of a recovery with very slow employment growth looms large. Budget 2015 must have at its core a series of measures to encourage the business community to create more jobs.
It is unlikely that this will be a ‘give-away’ budget. Nor should it be. We recognise that given Ireland’s fiscal position, there are serious constraints in terms of what Government can do to support the business community. Nonetheless, we believe there are a number of measures that can be implemented in Budget 2015 that will have a limited impact on the exchequer, but that will yield significant benefits in terms of job creation and economic growth.
1. Encourage Entrepreneurship
Setting up and building a new business is an incredibly risky undertaking. We are depending on the men and women across Ireland who are willing to take that risk, and invest their savings and time in starting a new business and creating new jobs. While efforts have been made to support entrepreneurs via the Employment Incentive and Investment Scheme and the Seed Capital Scheme, these schemes have seen low take up rates and should be revised to make them more easily accessible and use friendly.
The same can be said of the Credit Guarantee Scheme and we look forward to a promised enhancement to this programme. With a capital gains tax rate (CGT) of 33%, we believe that the risk taken by entrepreneurs is not being adequately rewarded. CGT should be reduced to 20% to incentivise entrepreneurs to take risks and create jobs. Improved support for entrepreneurs will create jobs.
2. Reduce Employers’ PRSI for Class A employees
The rate of Employers’ PRSI for Class A employees earning less than €356 per week is currently at 8.5%. There had been a temporary reduction to 4.25% from January 2011 to December 2013, but the rate has now reverted to the full 8.5%.
This additional cost is proving a significant deterrent to businesses who may wish to take on new employees. It has a disproportionate effect on the retail and services sectors, which are the sectors that we need to create employment in the small towns and rural areas of Ireland. We believe that this rate should again be reduced to the 4.25% level to incentivise business owners to take on staff and create jobs.
3. Encourage Construction in Key Locations
Ireland is in a housing crisis and the current tax regime isn’t helping. The disparity of 13.5% in VAT on the construction of residential housing versus commercial properties is inhibiting the construction of residential developments in key locations as the funding costs are significantly affected. Parity of treatment in both sectors based on the current commercial property rules would make many residential projects economically viable for construction firms and investors.
The 80% ‘windfall’ tax on rezoned land should also be abolished with standard Capital Gains Tax rules applying. A business owner who will receive a tax bill for 80% of any capital gains attributable to rezoning of land will be unable to afford to relocate the business and will therefore be unlikely to sell the land for residential development purposes at a time when suitable sites around urban centres are scarce.
A new stock of residential housing in a number of urban areas will help prevent the spiralling price increases in house prices we have seen of late. Government must prioritise Capital Expenditure, which has been stripped bare with 2013 spending only 38% of the 2008 total.
Finally, the Government’s standard Public Works contract is not fit for purpose and must be updated as a matter of urgency. These measures will not only support the building of much-needed housing but also give a boost to the construction sector and create jobs.
4. Maintain the 9% VAT rate for the Hospitality Sector
The hospitality and tourism sectors are labour intensive and employ significant numbers of unskilled or semi-skilled workers, a section of the labour force that has been hit hard by the collapse in the construction industry. Maintaining the 9% VAT rate will help sustain and grow employment in these sectors. Additionally, the economic returns from this employment are distributed throughout the country, with every county and city having the chance to benefit.
Budget 2015 can be used to drive economic and employment growth. If the economic recovery is to benefit people throughout Ireland, and be sustainable into the future, we must ensure that job creation remains our primary priority. Measures such as the tax relief on the Home Repair Maintenance and Improvement Scheme and the 9% VAT rate introduced in past budgets have been effective and supported job creation. It has been done before and can be done again. Our recommendations made in our pre-Budget Submission will help businesses across Ireland create jobs.
Ian Talbot is Chief Executive of Chambers Ireland.
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Could someone from the AAA please enlighten us as to where Socialism has ever worked?
@Fergus Sheahan: It worked for Chavez’s family and close friends. Is that the kind of answer you were looking for?
@Libertarian Ireland:
All animals are equal, but some are more equal than others…
@Fergus Sheahan: you mean the AAA’s brand of socialism aka populist socialism
As aspects of socialism can work well together in balance with capitalism e.g. Social welfare system; Norwegian tax system etc
@Vic’s Burd: Ireland has a balance between socialism and capitalism.
@Fergus Sheahan: Vietnam’s the only country I know of.
@Avina Laaf:
Well, thats old news. Identity politics (the kind that hates on white men) will decide who gets what in the new order.
Its time for a stimulus for the helicopter industry,
Join us
Maduro and his predecessor Chavez are darlings of the Left, lionised by our own President. Since the election of Chavez, Venezuela has become a basket-case economy – and coincidentally Chavez’s daughter has become the wealthiest woman in the country (although she prefers to enjoy her ill-gotten gains in Switzerland, far from the squalor that her father created).
Chavez, Maduro and Socialism have destroyed Venezuela, just as Socialism had destroyed
@Brian Lenehan:
Ami Horowitz… https://youtu.be/A0ON0xUMawg
Socialism always leads to poverty.
Yes the people of Norway and Sweden are so poor
@Ibhar Mac Suibhne:
Yes Sweden, such a harmonious society of late, probably the most refugee welcoming, Islam friendly society in Europe… That was recently stuck with Islamic terror… https://www.google.ie/amp/mobile.reuters.com/article/amp/idUSKCN0SG0I220151022
@Ibhar Mac Suibhne:
Swedes forced go to Finland for medical care due to overcrowding… https://www.thelocal.se/20161229/swedes-forced-to-go-to-finland-to-give-birth-due-to-overcrowding?utm_source=dlvr.it&utm_medium=twitter
@Ibhar Mac Suibhne:
Norway?? Norway is a oil rich, stand alone nation, the country is currently being run by a centrist led political party, before that, it was a conservative led minority government.
@Brian Lenehan: That’s a totally false you’re making Venezuela sound like a modern European state pre Chavez. Inflation was double before was Chavez was elected and Venezuela had numerous severe banking crises only a few years before him. Poverty was far worse as was illiteracy. Economical troubles because of low revenue due to falling oil prices were around before him too.
It is largely because he never moved Venezuela off oil which is a stupid thing to do when you fund your policies with it. Would have been a warning sign to Scotland when it sought independence and made claims based on oil barrel prices which were several times higher than they are now.
Oh yeah, if you google ‘ Hugo Chavez daughter wealth’ you can see the people you got that information off. FoxNews, Breitbart, National Review, Dailymail, etc. are all the top searches
Maduro is quite sinister, however.
@Ibhar Mac Suibhne:
You cannot consider Norway and Sweden in same extreme framework as
Venezuela. Venezuela is based on populist socialism, that our looney lefties here preach, which has clearly destabilised the economy.
In this blog: http://blog.peerform.com/top-ten-most-socialist-countries-in-the-world/
Ireland is regarded, along with Norway and Sweden, as a socialist nation too. We have one of the best welfare systems in the world.
We could model the Norway anti-populist socialist model as the best in the world, but they have their oil to maintain this system.
@Lepanto: The topic of this conversation was socialism I thought?
@Vic’s Burd: I was commenting on Lepantos comment that “socialism always leads to poverty”
And by the way Venezuela has plenty of oil too, its just unlike Venezuela Norway doesn’t have the USA undermining its socialist stance.
@Lepanto: “Swedes forced go to Finland for medical care due to overcrowding…”
Shit happens Lepanto, under the Irish National treatment purchase fund , I was sent by the HSE to the UK for treatment…..what’s your point here?
@Jason Byrne: Let me school you. I’m Irish-Venezuelan. You’ve said that”Inflation was double before was Chavez was elected” This is total BS AAA crap.
Let me tell you in figures you can understand, which is the local currency Bolvar – USD exchange rates. The Bolivar had a very solid and stable exhange rate of Bs 4.30 per USD. This lasted for decades until Black Friday in 1983 when protectionist economic measures backfired fast and started inflation as we know it.
In 1984 it was Bs 13.55 per USD. in 1990 it was Bs 42.65 per USD. in 1999, the year before Chavez came to power was Bs 509 per USD. In 16 years the Bolivar went from Bs 4.30 to Bs 509.
Then in 2007 a new currency was introduced. The Bolivar Fuerte (Strong bolivar) which was the old currency divided by 1000. So in 2007 when the new Bolivar was introduced it was Bs 2150 per USD so it became VEF 2.15 per USD.
Now in 2017, there is no real way to buy currency, the official exchange rate is VEF 9.90 per USD, but its a Micky mouse rate, only a very small numbers of first necessity companies gets access to some of this rate. the day to dasy business and prices are based in the open parallel market which is VEF 4400 per USD. YES, Four Thousand Four Hundred and Forty VEF to $1. which means Bs 4400000 of the old currency. (Over for Millions in case you think I’ve made a typo).
So compare from 4.30 to 509 in 16 years Pre-Chavez and from 509 to 4400000 17 years after. You do the maths.
@Ibhar Mac Suibhne: what always lead’s to poverty is greed, corruption, lies and no accountability which happens to govts left and right depending on the type of individuals involved. Our own government is a good example of this.
@Brian Lenehan:
Utopia is not for this world. Dont believe anyone who tells you it is.
Especially worth reflecting on at Easter time. Che, Chavez, nor Lenin did not die for your sins.
Where’s Waddler
@Chef Harold:
He’ll be along shortly to tell us that the problem isn’t too much socialism, it’s not enough socialism, and that the capitalist elites are somehow preventing Maduro from printing more money to solve all the problems. Or something.
I think he got another account blocked again. Don’t you need a phone number to register. Guess he ran out of phones
Would be interesting to see Boyd Barrett et al attend.
Although it is true that Venezuela is closer to achieving equality than Ireland is, in that everyone is equally poor, starving and at risk of violence.
Yea like Capitalism has really done wonders for the world. I’m sure greed, corruption, outside influences and poor regulation of power, which seem to feature in all political systems, have all contributed to the dreadful goings on in Venezuela, but I do prefer the ideologies of Socialism to Capitalism.
@Aogan Keyes: you can’t eat ideology, Socialism sounds good but it doesn’t work and it never has, human natural works against it, Paul Murphy should pay Caracas a visit
@Aogan Keyes: All isms are bad, there is no system that looks after the people properly, yet we have a nightmare government making rich foreigners even richer and I bet there will be no support marches in Venezuela or any other countries where people want to get themselves hear heard. We really need to worry about the growing problems we have here already. Illegal migrants are sucking this country dry, now if we wealthy enough to provide shelter and food but we were bled by The EU over several years, listened to politicians making cut and cut but people still came here with no welfare systems to claim what they felt entitled to. Migrants are find if they want to contribute but coming here for the freebies is disgraceful but nobody is stopping it. I am not picking on Venezuelan living here but whatever happened EU citizens being granted free movement or was that a joke?
@Aogan Keyes:
I love it, so it’s capitalism’s fault from other countries which is the problem and not socialism itself. You should hook up with Wally to discuss printing money as apparently with Socialism you can simply print as much as you want with no negative impact
@Aogan Keyes:
Capitalism has pulled more people out of poverty than any other economic system, it’s not perfect, none are, but Socialists/Communists think Socialism IS the perfect system.
@Fergus Sheahan: there are different forms of socialism, the populist-socialism that Paul Murphy and his party favours was the same model that Venezuela used.
Ireland is regarded as a socialist nation more than capitalist; with our welfare system and strong constitutional led policies. As is Norway, Finland, Netherlands etc. Like us they are all non-populist socialism with an element of capitalism thrown in.
There has to be a balance.
@Vic’s Burd: everything in moderation works, Paul Murphy is a clown we can all agree on that
@Aogan Keyes: You sir, are overfed on clean capitalist food. I think a spell in the GULAG would increase your love for the state and its forcible redistribution of others property. You can fill your cup will socialist ideology as you labour in the Uranium mines of Siberia.
@Vic’s Burd:
None of those countries are socialist. They allow for the private ownership of capital. They are capitalist, with strong welfare programmes.
And the end game of welfare states is upon us, the generation that is meant to pay for all these benefits are either not born, or languishing in low wage hell.
You always run out of other peoples money in the end.
I’ll put it on my bucket list
@Fergus Sheahan:
Don’t encourage murphy to go globe trotting on the taxpayers expense. He’ll be off like a shot on “fact finding” visits. Sure he’s already been to Egypt to support his Muslim brotherhood detainees on our expense.
This has to be one of most undocumented crisies in the world, children are dying because that socialist dimwitted bus driver maduro is single handidly(along with his cronies) destroying a country that was the richest in South America in 2001 along with his deceased predecessor Chavez. Socialism never works as for that crowd AAA in Ireland they make me physically sick with their utter nonsense.A crying shame considering it has the most oil reserves per capita in the world.
With regards to the passenger on United Airline being physically pulled off the plane and now has a broken nose and has lost some teeth, the slogan for United Airlines was “The Friendly Airline” Really !!! Companies have lost respect for their customers, The only thing that counts is to post a profit every quarter.
Why not protest about the scandal of our homeless people instead? Get our own house in order first and keep the pressure on the FG traitors.
No one representative from Ireland attended today, not on…no AAA, no SF, no FF, no FG and no IDP. Anyone know what any of our political parties stance is on the situation in Venezuela is? #NoMasDictadura
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