Sharon Keogan (Independent) | Oireachtas source

I welcome this timely opportunity to make statements on the cost of doing business. This is a year in which the costs across the nation are increasing. Businesses in particular suffer not just as a result of increased business costs, but also due to the costs imposed and initiatives created by this Government.The Government's increased cost of business grant offers €257 million for small and medium-sized businesses. Given that there are 143,000 rateable businesses in Ireland, when this fund is divided out, just under €1,800 will be available per business, in effect, if this grant is structured to be shared equally. That is less than €5 per day, so well done.

Eligible businesses will receive a once-off credit payment as a contribution towards the rising costs faced by businesses. The following are a few examples of the increased costs imposed on businesses in 2024. On 1 May, carbon tax will increase. The general employment scheme critical skills occupation list will increase from €30,000 to €34,000. Parent’s leave and parent’s benefit will be extended by two weeks to nine weeks from August 2024. The sick pay entitlement increased from three days to five days per year in January of this year. In October of this year, PRSI is set to increase by 0.1%. Auto-enrolment is a new pension scheme for certain employees who are not paying into a pension; they will be automatically included in the scheme but can opt out after six months. Auto-enrolment is expected to be introduced in January 2025. The Government raised the minimum wage from €11.30 to €12.70 per hour from 1 January of this year. There is also the extra bank holiday. All of these are in addition to the cost of insurance, gas, oil, electricity, the upkeep of depreciated assets and more.

Under this scheme, for qualifying businesses with a 2023 commercial rate bill of less than €10,000, this grant will be paid at a rate of 50% of the business commercial rate bill for 2023. For qualifying businesses with a 2023 commercial rate bill of between €10,000 and €30,000, the ICOB grant will be €5,000.

The Irish Timesreported in December 2023 that IBEC estimates that the annual increases in labour costs arising from these measures will exceed €4 billion. This demonstrates a massive chasm between the Government’s understanding of business needs and the real help they need. Businesses need a government that relieves cost obligations and rates. We could be forgiven for thinking this is some sort of scam in the name of generating winning electoral policies around parental leave, more sick days, auto-enrolment in pensions and so on. A likely knock-on effect of these electorally appealing policies will simply be that there are fewer jobs.

The restaurant association and the hospitality trade have called for a reduction of VAT from 13.5% to 9%. These businesses are an integral part of our communities. Two restaurants are closing per day and the closures are due to the cost of living and the increased cost of food, energy, interest rates and wages, as well as labour availability. The CSO data state that last year, 15,609 businesses were engaged in food and beverage services in this country. At the end of 2023, 130,800 people were employed in the sector, with an additional 79,680 indirect employees because of the operations of a restaurant. According to Jim Power, economist, the closure of a restaurant costs the State up to €1.36 million in total economic impact in one full year.

In recent weeks, I have received correspondence from many members of the Irish Association for Counselling and Psychotherapy. This group has 6,000 members and is calling for increased accessibility to therapeutic services by extending the VAT exemption to counsellors and psychotherapists in Ireland. The IACP’s comprehensive VAT proposals were submitted to the Minister for Finance in March and call for creating equity of treatment and parity of esteem for mental health professionals providing psychotherapy and counselling services with those who deliver physical healthcare. I urge the Minister to take their concerns seriously. Mental health services are part of a crucial sector but they are under-resourced despite being of essential public importance.

I call on the Government to listen to the people running businesses. They know how to solve their operational issues. Sweeping policies that affect enterprises all over the country, regardless of the size of the industry, can have a catastrophic effect. Aside from competition, automation and inflation, businesses will likely fail this year due to the added burden of the costs outlined above. Ultimately, a grant of €5,000 will do little to help small to medium-sized businesses which face ever-increasing costs at the hands of our Government. These policies will only serve to stifle entrepreneurship in this country. Day one operating costs, taxes and obligations are deterring people from operating their businesses and access to the market. Taxation is considered theft by some but can you really rob a business that cannot maintain liquidity or even establish itself with so many overheads imposed by the Government?

The social enterprise sector is one of the most untapped sources of economic and social value to the State but it is rarely looked at by Ministers or Departments as an economic value. I would like the Minister to consider allocating moneys for the development of these enterprises to the local authorities through the LEOs in order to engage in supporting credible and sustainable social enterprises that will tackle social and environmental issues while also creating employment. This is one sector the Government could look into while supporting the local enterprise offices. It is an untapped sector within our economy. I urge the Minister to look at this during his ministry.