Low inflation rate conceals reality of high cost business environment.
SMEs crippled by exorbitant energy and waste prices.
In response to the latest inflation figures released by the CSO today (16th January), ISME, the Irish Small and Medium Enterprises Association, demanded that Government immediately tackle the costs under their control, which continue to cripple business throughout the Country. The Association acknowledged that inflation is currently low but warned that unless key costs, including waste, energy and local charges are addressed, the recovery will be delayed.
Inflation currently stands at 0.2%, a composite rate for all price changes, which conceals the burden of increasing state-influenced business costs being borne by SMEs.
According to ISME Chief Executive Mark Fielding, “The CSO inflation figures give a “false” picture of business inflation as the composite figure masks the true effect of State cost increases. Companies are continuously attempting to reduce their costs to compete but are hampered by increases introduced by the State, undermining Government policy of an economy based on export driven growth”.
‘“These state-influenced business costs, which must be factored into their pricing strategies are simply too high. This unfairly disadvantages Irish SMEs when it comes to competing in the international export market. Unless these costs are reviewed and reduced to at least match our competitors, the Governments aspirations for an export led recovery will be unattainable.”
The Association called on the Government to:
Review all relevant business costs, which should be benchmarked internationally.
Reduce SME energy costs, still one of the highest in EU.
Address local government inefficiencies, commercial rates and upward only rents on legacy leases.
Reduce Public Sector costs by addressing the increments, perks and inefficiencies.
”The Government has a key responsibility in this area and it is imperative that action is taken to control costs under their remit. It is time for a concerted effort to reduce our high business costs to ensure competitveness, encourage new business and create employment,” concluded Fielding.