• Government must act on business costs • Public sector cost reduction and efficiencies must be priority.
ISME, Thursday 13th November 2014.
At the release of the CSO October inflation figures today (13th November), ISME, the Irish Small and Medium Enterprises Association, called for a review of all state controlled costs, benchmarked to our international competitors and a concerted effort to reduce them, to allow our exporting sector to compete, both at home and abroad.
The October CPI inflation figure was -0.3%, with annual inflation rate of 0.2%.
Speaking after the release of today’s figures, ISME Chief Executive, Mark Fielding said, “High business costs make Ireland less attractive in terms of foreign direct investment and negatively affect indigenous business in both domestic and international markets. Small and medium businesses continue to suffer state influenced cost increases which reduces the certainty for business and hampers our ability to grow and create jobs”.
“The low aggregate inflation figures disguise increased costs in the state sector due to inefficiencies and poor management. All the Government effort in producing another Action Plan for Jobs will be useless unless a concerted effort is made to tackle these shortcomings which can reduce and curtail costs across the business spectrum.”
State cost inflation, if left unchecked, will erode any short term competitive advantage of exporters in the UK market and leave them exposed when sterling weakens and the euro recovers.
The Association therefore strongly recommends that the Government’s Action Plan for Jobs be mainly focused on cost reduction. The basic truth is that jobs will not be created while costs are high. Increased productivity is the best defence against inflation. Measures to encourage improved productivity in the public sector must be applied, in tandem with the ongoing efforts of private enterprises.
The Association called on the Government to: • Ensure that all state imposed business costs are benchmarked internationally. • Reduce public sector costs by addressing the increments, perks and inefficiencies. • Address energy, transport costs and exorbitant fees of the monopolistic legal profession.
“Continued progress out of recession will be based on a lower cost competitive business environment, which allows us to compete both domestically and internationally. The Government’s initial promise to deal with barriers to competition and sheltered sector costs must now belatedly be acted on”, concluded Fielding.