Mr. Ian Talbot:

Budget 2014 comes at another crucial time for Ireland's economy. We may well have reached an inflection point, as the downturn has abated and we are moving tentatively back into a period of economic stability and perhaps even growth. Employment figures are improving; retail sales indicate a slight upturn and our overseas visitor numbers, a vital metric for the hotel and catering sector, have increased. However, if these tentative improvements are to gain momentum, the Government must be resolute in building confidence. We note and applaud the decision to bring budget day forward. This shortens the period during which consumers and businesses are scared out of their wits regarding how hard or otherwise the budget will be. Again, this will support confidence and confidence is key.

Our core suggestions revolve around the following themes. First and foremost, do no harm. After more than three quarters of employment growth, budget 2014 must help by not driving employment costs any higher. There must be no new or increased taxes on employment, specifically in areas such as PRSI and responsibility for sick pay. This will build confidence among employers that labour costs will not rise and thus support decisions to hire rather than to get along with the staff they currently have. Second, there is a huge amount of pent-up demand for home improvements that could unleash consumer spending and spur employment growth in the construction and related trades. We have made suggestions around extending a special VAT rate for the home repair, maintenance and improvement sector below a specific value. That could incentivise consumers to invest in their homes and, in turn, spur domestic demand in terms of white goods, brown goods and so forth, all of which generate VAT at the 23% rate.

Third, we have made a series of recommendations to support micro, small and medium-sized enterprises revolving around support for working capital, including raising the qualifying amount for companies to use cash accounting for VAT, enhancing the profile of the seed capital scheme and improving the employment investment and incentive scheme. We will be pleased to discuss these in further detail, if required.

Fourth, we suggest using savings achieved from local authority mergers and the arrival of local property tax for targeted rate reductions on town centre businesses which, for the most part, are domestically focused and, as a result, highly challenged.

On the spending side, all Departments must ensure the decisions they take are job proofed. In particular, the Department of Social Protection must be sympathetic towards employers and the self-employed in balancing its budget. Similarly, the Department of Health must learn to live within its budget, rather than simply hiking charges such as a health levy and deal with the wider viability of the health insurance market.

It is essential that Ireland maintain a tax regime that supports our strong foreign direct investment sector. Accordingly, corporation tax must remain at a rate of 12.5% and the special rate of 9% for the hospitality sector must be continued to provide further security for a vital employment sector.