Written answers

Thursday, 13 March 2014

Department of Jobs, Enterprise and Innovation

Small and Medium Enterprises Supports

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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98. To ask the Minister for Jobs, Enterprise and Innovation the extent to which particular or specific cost issues have been brought to the attention of his Department by small and medium sized enterprises; if particular action may or is being taken to address these issues with benefit to the economy in early date; and if he will make a statement on the matter. [12696/14]

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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My regular engagement with small and medium enterprises around the country, and with their representative bodies, provides a forum to discuss their concerns on a wide range of issues, including those related to costs such as local authority charges, utility costs (including energy), rents, and labour costs.

The Forfás report “Costs of Doing Business in Ireland 2012” published in April 2013, showed that Irish cost competitiveness has improved markedly over the last number of years. It also indicates that business costs in Ireland have reduced significantly in recent years, with overall price levels in the economy falling back to levels last experienced in 2002. The improvement in business cost competitiveness has been driven by significant reductions in property related costs (in terms of purchase and rent levels) and falling prices across a range of professional and business services. There have also been relative improvements in labour costs in Ireland, which fell on average by 0.9% per annum in the period 2008-2011 while labour costs increased in the euro area by 4.6% per annum on average in the same period. These reductions benefit SMEs as well as larger companies.

Government actions to support small and medium sized enterprises are set out in the Action Plan for Jobs. Since the Action Plan process was launched in 2012, a significant number of initiatives have been introduced to support the SME sector. These include:

- tackling the issue of late payments by transposing the EU Late Payment Directive into Irish legislation;

- the introduction of new financing models for SMEs, such as the Microfinance Loan Fund for start-ups and the Partial Credit Guarantee scheme;

- Corporation Tax exemption to 2014 for companies that commenced, or will commence, trading in 2012, 2013 and 2014;

- the introduction of the JobsPlus scheme that provides a subsidy to employers who recruit a person who has been unemployed for 12 months or more;

- the reform of support structures for SMEs through the establishment of the new Local Enterprise Offices, which is well advanced within my own Department;

- the provision of advice and training by the Sustainable Energy Authority of Ireland to businesses that are looking to reduce their energy costs; and

- reductions in the administrative burden on business. To date, my own Department has achieved a 25% reduction in its administrative burden on business, amounting to a potential annual saving for business of over €207 million.

Budget 2014 also contained a number of additional initiatives to support SMEs. These include an increase in the cash receipts threshold for VAT, which will improve cash-flow for businesses, and a new subsidised Financial Training programme for SMEs. We will continue to take actions to support SMEs, including by tackling costs, through the 2014 Action Plan for Jobs.

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