High Services inflation, driven by insurance, banking and legal fees.
Lack of government action is undermining Competitiveness.
At the release of the CSO inflation figures for August today (8th September) ISME, the Irish Small and Medium Enterprises Association, warned that continuing increases in business costs are stalling our recovery. The Association called for a more focused approach to rising business costs from Government, especially those costs that are state-influenced.
There was a slight decrease in the annual CPI inflation figure to minus 0.1%, while the inflation for the month of August is minus 0.2%.
Commenting on today’s figures ISME CEO, Mark Fielding said, “Unjustified increases in business costs are stifling growth in the Irish economy. Excessive rises in motor insurance, legal fees and bank charges are causing a rethink on business growth plans which has a negative effect on job creation”.
“Increases of 35% and over are common in general insurance while motor insurance premiums are in some cases double that. 97% of respondents to the ISME survey have had increases imposed. The Government have allowed the Insurance industry to charge what they like, in a broken market where investigation and intervention is necessary.”
The Association called on the Government to:
Investigate exorbitant insurance, bank interest and legal fees.
Ensure that all state imposed business costs are benchmarked internationally.
Ensure that SMEs are not hampered by labour, tax or regulatory increases, while post Brexit exchange rate difficulties persist.
Stand firm on public sector wage demands.
Reduce public sector costs by addressing the increments, perks and inefficiencies.
Outsource more state sector services to SMEs.
“This Government needs to investigate the cartel-like action of the insurance, bank and legal industries, where price increases are imposed on business without explanation or justification. ‘Our hands are tied’ and other excuses are not what we want to hear from government when decisive action is urgently needed”, concluded Fielding.