Peter Fitzpatrick (Louth, Independent) | Oireachtas source

Micro, small, and medium enterprises, MSMEs, are instrumental in shaping the economic landscape of emerging markets. Their ability to innovate, generate employment, and contribute to regional development makes them indispensable. Despite challenges, the growth potential of MSMEs is undeniable. In emerging markets, the private sector consists of more than 95% of small but growing businesses, SGBs, also referred to as MSMEs. These enterprises play a crucial role in fostering innovation, generating employment opportunities, and driving economic development. MSMEs often function as the catalysts for economic inclusivity, as they provide jobs to a significant portion of the population. MSMEs constitute 95% to 98% of all businesses, produce 50% of GDP, and generate 1.2 million jobs in Ireland, representing 99.8% of active enterprise.

These enterprises encompass family-owned businesses, rural-owner managers, traditional to high growth and technology start-ups and often have deep roots in local communities, contributing to regional development and growth. They are widely known for their agility and ability to adapt to market demands quickly. Yet, with increasing input costs due to increases in energy, inflation, insurance, cost of labour, national minimum wage increases, higher PRSI, plans for pension auto-enrolment, extended sick-pay entitlements on top of VAT increases, along with many other input factors, MSMEs are finding it very difficult to continue trading.

The cumulative impact of these cost increases, as well as the looming deadline of May 1 to pay off warehoused tax debt from the Covid restrictions period could lead to 1,000 business insolvencies this year, with the retail, hospitality and construction sectors coming under particular pressure. This has been particularly evident in the past two weeks in light of a spate of high-profile closures in the hospitality industry. The present challenges to business viability in the restaurant and hospitality sector have the potential to significantly affect tourism this year. Tourism is the cornerstone of the economic viability of our regional towns and villages. We need to create a roadmap towards ensuring Ireland is an attractive place to do business, not crucify the tourism and hospitality sectors with cost increases. The tourism sector has always relied heavily on overseas visitors, especially in my constituency of Louth and east Meath, as we border the North. However, the Government needs to recognise the importance of the tourism industry to every town and county. We need to support the delivery of enhanced tourism amenities in line with the objectives of the new National Development Plan 2021-2030. As an interim measure, my colleagues and I in the Regional Group are calling for a reduction of the current VAT rate of 13.5% to 9% for food businesses in the hospitality sector, as well as cutting the PRSI rates for struggling SMEs by Easter. Adjusting the 8.8% employer’s PRSI threshold to a ceiling wage of €495.30 per week will be a lifeline for many businesses. We are calling for a revision of the debt warehousing scheme to allow longer repayment schedules and preferential interest rates to retain business viability and sectoral employment.

While the Ukraine credit guarantee scheme provided €1.2 billion in low-cost lending to business, along with the temporary business energy support scheme, we need to support the sector in any way we can, which we can today. It is not only important that we relieve the pressures and costs on these sectors but also that we safeguard jobs and protect the industry. There are evident challenges across the business and SME sectors. Coming off the back of the pandemic, the hospitality and tourism sectors have made a good recovery. Yet, I have spoken to many businesses in Dundalk, County Louth and east Meath over recent months. I have been flabbergasted by the cost increases they are facing. These businesses need every support we can give them to keep their doors open in the coming months.

If we look across the pond, the British Government released an action plan to support small and medium-sized enterprises from 2022 to 2025. This aims to reduce the barriers for SMEs when it comes to being part of a department’s supply chain. The plan is designed to help SMEs achieve sustainable growth, which will offer innovation, responsive customer service and fantastic employment opportunities. The plan is flexible and allows the commercial function within the department to continually seek new opportunities, hear feedback directly from SMEs and action that feedback to create a level playing field for SMEs in competing against larger organisations. With this plan, the UK Government is committed to enhancing the UK’s reputation as the best place in the world to start and grow a business. With that in mind, in the long term, we are calling for the immediate establishment of a task force representative of micro and small business with Departments and Government agencies personally chaired by a Cabinet Minister. The aim is to review the application of all Government-controlled costs and to reduce Government charges and the costs of doing business. We need to enhance flexibility in Government procurement of State services to permit Departments such as education, health, defence, and local government to procure supplies from local suppliers, as opposed to relying solely on central purchasing. We believe that by providing quarterly updates to the Oireachtas joint committee on enterprise, this will ensure that this will be a task force for action, not talk.

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