27th September 2022: ISME has expressed its disappointment at the lack of direct support for SMEs in Budget 2023. While welcoming the positive measures announced today to tackle the rising cost of living, ISME is concerned that the measures announced to support businesses may be insufficient to protect many retail, leisure, manufacturing and hospitality businesses over the next year.
ISME’s summarized notes for Budget 2023:
- Budget 2023 at €11bn is an enormous budget.
- However, it is clear that the inflation mitigation measures predominate.
- There is help for renters in the form of a €500 per annum rental credit. However, with a 97% flight of rental accommodation over the last 10 years, there are no supply-side supports for rental accommodation.
- The ending of the 9% VAT rate in early 2023 is most regrettable, and an opportunity lost to address inflation in services costs.
- The increase in the standard rate cut-off to €40,000 is long overdue and most welcome but will still mean that people earning €5,432 below the average industrial wage will be paying tax at the marginal rate.
- There are no changes to the CAT or CGT regimes, but there is reform promised on the KEEP scheme, which has failed to function since its enactment.
- The 10% levy on concrete products will severely impact the cost of construction at a time when construction input prices are already high.
- The Temporary Business Energy Support Scheme (TBESS) energy support of 40% is welcome, but may be insufficient to protect many retail, leisure, manufacturing and hospitality businesses over the next year.
- The TBESS is the only substantial direct support to SMEs in Budget 2023.
- With expenditure in our health service set to exceed €23bn for the first time in 2023, it is clear that both the HSE and the Sláintecare plan is in need of external examination and validation. We believe an expert team should be assigned to review current and capital expenditure in our health service to ensure efficient and effective use of resources, and secure the best outcomes for the citizens who avail of its services.
SUMMARY OF ISME’s PRE-BUDGET SUBMISSION RECOMMENDATIONS
TAXATION
- Implement ISME’s 18-point tax reform.
- Update and reform the current ARV calculation system for commercial rates, and reform of the LPT system
- Use the taxation system to incentivise a Basic Business Qualification at QQI level 6 for every business owner and manager.
SPENDING
- Implement tax policies that align with, and encourage, private sector expenditure on the green economy.
- Divert spending away from the university sector towards skills-based, vocational, and life-long learning.
OTHER
- Introduce a new 2% rate of PRSI on weekly earnings up to €440 pw and a new 6% PRSI rate only on earnings above €440 pw.
- Conduct an immediate review of indigenous industrial policy to reduce our dependence on foreign-owned multi-national
corporations. - Reintroduce the Statutory Redundancy Rebate (or remove the 0.5% employers’ PRSI levy which funds it).
- Reduce the public-private sector pay gap to 10% by 2025.
- Establish a standing Public Service Pay Commission.
- Ban all (including historic) upward-only rent reviews.
- Stop increasing the NMW, introduce measures that eliminate the “Jobs Kill Zone” instead.
Read our full pre-budget submission here.
