- ISME believes the Government needs to take a far more aggressive approach to maintain the liquidity of small business
- Covid19 has caused a societal crisis of confidence in the ability to spend, by consumers and employers. This crisis of confidence can only be countered by the availability of credible amounts of liquidity.
- ISME is suggesting four measures the government should take that will cost less than the alternative of permitting six-figure job losses and widespread business closure.
While we acknowledge the amount of work being carried out by government on employee support measures to help workers affected by Covid19, we are concerned by the absence of real progress in the maintenance of liquidity for SMEs.
The support measures announced by Revenue will, at best, slow the rate of cash burn by SMEs. They will not reverse it,nor will they make up for loss of earnings, which in many sectors are catastrophic.
The proposals to provide working capital are inadequate, and are at uncompetitive and/or unaffordable rates.
The Government needs to take a far more aggressive approach to maintaining the liquidity of small business for exactly the same reasons as they are trying to maintain employee incomes: Without spending in the economy, everyone, including the Exchequer, will run out of cash within a matter of months.
ISME is calling on Government to adopt the following measures:
- The Revenue should rebate to employers an amount up to 100% of corporation, payroll and sales taxes collected from them in 2019.
- The collection of payroll taxes by Revenue should be suspended until employers are in a position to return them, for up to one year.
- SBCI working capital funding must be provided to businesses at low, zero, or negative rates.
- SBCI must diversify its funding of SMEs beyond the pillar banks, and could start with PTSB, which remains substantially in State ownership but does not have a direct conflict of interest with its own lending portfolio.
While some of these measures appear drastic, they will cost less than the alternative of permitting six-figure job losses and widespread business closure.
Covid19 has caused a societal crisis of confidence in the ability to spend, by consumers and employers.This crisis of confidence can only be countered by the availability of credible amounts of liquidity,which will keep viable businesses functioning, and their workers employed.The longer we wait to act, the greater will be the damage done, and the more we will have to spend to repair it. We must act now,