Michael Lowry (Tipperary, Independent) | Oireachtas source

It takes initiative, conviction and courage to start a business. Those who take that leap of faith stake their future on making that business a success. No business sets out to fail. Managing a business involves hard work. It is time-consuming, demanding and full of stress and worry. It is constant, unrelenting pressure. It takes an emotional and physical toll on those who take on the ownership of a company.

Trying to cope and deal with regulatory and compliance requirements is a big issue for small businesses. They do everything possible every day to increase turnover in order that VAT and taxes can be paid, workers can be paid and the overheads and ever-increasing input costs can be paid. All of this involves a lot of sweat and long hours, and at the end of it the books in many cases are not balanced. For all the effort, therefore, the owner of that business ends up effectively paying his workforce and paying the State with little or nothing left for himself. That is the problem small businesses face at the moment.

There was widespread disillusionment felt by the struggling hospitality business sector up and down the country last week when the Minister for Finance categorically rejected our calls to reduce the 13.5% VAT rate to a more manageable 9%, a reduction that would afford such businesses some level of relief and offer them a glimmer of hope for survival. These are the cafés and restaurants dotted across our towns, across Tipperary and across the country, and the pubs that serve food to bolster their trade. They employ local staff. They provide a social hub for local people to meet and chat. They do not make a fortune but do need to make a profit. They need to see a return for their efforts.

In November of last year, approximately 50 restaurants, cafés and food outlets across the country closed. They were joined by another 140 food-led businesses that closed their shutters between July and October 2023. The post-Christmas lull in trade has brought further closures, including across my county of Tipperary. Jobs have been lost and premises have been left vacant. As a result, rates and taxes have been lost to the State. Social protection is naturally obliged to assist the disemployed. Suppliers have been impacted as they too battle to keep their heads above water and maintain their staffing levels. Every business, no matter how big or small, that closes its doors creates a spiral. In cases like these, when one door closes another prepares to close. SMEs make up 99% of all Irish businesses. In the year just gone, 1.17 million people across Ireland were employed by small and medium-sized businesses. A significant majority of those businesses fell into the micro-sized category, employing fewer than nine people. These people include sole traders such as electricians, plumbers, carpenters and painters, and our independent retailers, such as the shops and pubs we have on the streets in our towns. Many of them have traded for generations and have become an integral part of our communities.

In advance of budget 2024, Accountancy Ireland highlighted that SMEs across the country were concerned about the increasing cost of doing business. It recommended limiting any increase in the national minimum wage in the year ahead to the rate of inflation. It opposed the 12% increase recommended by the Low Pay Commission. It strongly advised that such an increase would place a significant burden on the majority of SMEs. That advice went unheeded. Instead, additional costs such as automatic pension enrolment, raised PRSI contributions, extended sick leave entitlements and additional bank holidays were added to the financial worries of small businesses. These are progressive measures and welcome, but the cost of implementation should fall to the Government, not the employers. These decisions have rocked many micro-businesses to their core. Growing numbers across every small business model are crunching the numbers and the bottom line is bleak, particularly in the hospitality, retail, tourism and horticulture areas. Plans to expand staff numbers are replaced with worries about how to retain staff. The inability to afford staff has become a gloomy reality. Meanwhile, workers face the real prospect of unemployment.

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