Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The Government will continue to fulfil the conditions of the bailout programme, it will carefully plan full market return, it will build on the strong sectors of the economy and repair the weak sectors until they are strong again, it will grow the economy and create the jobs for which so many out of work and so many young people yearn.

Last year, in the budget, despite the lack of resources I took a series of initiatives to grow different sectors of the economy in farming and agrifood, in foreign direct investment, in the export trade, in the tourism industry, in financial services and in the property market and these initiatives have helped to grow and create jobs in these sectors.

SMEs

This year I will follow a similar strategy but my emphasis will be on small and medium-sized enterprises, SMEs. Our large exporting sector, which includes both multinationals and growing indigenous companies, is forging ahead and delivering solid export growth and a strong balance of payments surplus. I am aware, however, that the operating environment in the domestic economy remains difficult, particularly for small and medium-sized enterprises. To give this critical sector a helping hand, I am bringing forward a ten-point tax reform plan. This plan includes measures that will make a real difference for the SME sectors such as reforming the three-year corporation tax relief for start-up companies to allow unused credits to be carried forward. This will help SMEs and start-ups navigate their early years. It also includes increasing the cash receipts basis threshold for VAT from €1 million to €1.25 million and amending the close company surcharge de minimis level. Both of these measures will improve cash flow for SMEs. The plan also includes amending the research and development tax credit by doubling the initial spend eligible for the credit from €100,000 to €200,000 to encourage innovation and business expansion and extending the foreign earnings deduction for work-related travel to certain countries beyond the BRICS, which will support exports. These measures will make a real difference to SMEs by assisting their cash position and supporting their creation of jobs. I also will publish a public consultation paper on a micro-business tax today.

Given the fragile state of the public finances, the individual measures are modest. However I believe the combination of the measures will have a significant beneficial impact. I also am pleased to announce an additional initiative that will support small businesses in all sectors of the economy. Virtually all businesses in Ireland rely on cost-effective transport for their inputs and outputs. This transport is provided by hauliers, the majority of whom own small businesses. In order to assist the competitiveness of this key industry, I am introducing a rebate on diesel with effect from 1 July 2013.

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