Dáil Éireann Debate, Thursday - 23 November 2023
41. Deputy Cathal Crowe asked the Minister for Enterprise, Trade and Employment his plans to introduce mitigating measures to ensure that small and medium-sized businesses are able to bear the additional costs they are facing in terms of increased wage bills, additional bank holiday payment rates and increased commercial rates. [51128/23]
View answer63. Deputy Paul McAuliffe asked the Minister for Enterprise, Trade and Employment for an update on plans to assist businesses struggling to meet the increased minimum wage with a view to introducing a living wage. [51533/23]
View answer70. Deputy Barry Cowen asked the Minister for Enterprise, Trade and Employment what action he is taking assist SMEs with the cost of doing business; and if he will make a statement on the matter. [51226/23]
View answerI propose to take Questions Nos. 41, 63 and 70 together.
It is understandable that businesses are concerned about the impact of rising costs.
Inflation in Ireland – although still elevated at 5.1 per cent in October – is generally declining. Recent forecasts from the Central Bank of Ireland indicate that inflation will continue to moderate to 3.2 and 2.3 per cent in 2024 and 2025, respectively. Wholesale price inflation has also been levelling off in recent months.
The Government has provided significant support to business throughout the period of increasing costs and has been proactive in limiting the fallout from higher rates of inflation in input costs and prices. However, it is not possible to insulate every business from the total impact of these costs.
Over the two-year period prior to Budget 2024 a total of €12 billion – 4½ per cent of national income – was provided in cost of living and doing business supports, comprising a mix of permanent and one-off measures, to ease the burden of inflation on households and businesses. The main programme introduced by Government to alleviate cost pressures for small businesses was the €1.3 billion Temporary Business Energy Support Scheme.
Budget 2024 also contained several measures which will support businesses facing increased costs. For example:
• The 9% VAT reduction for gas and electricity was extended for an additional 12 months, until the 31st of October 2024;
• The temporary excise rate reductions applying to auto diesel, petrol and marked gas oil were extended until the 31st of March 2024; and,
• There was an increase in VAT registration thresholds for SMEs, to €40,000 for services and €80,000 for goods.
The Increased Cost of Business Grant was also announced and will be targeted at small and medium sized businesses who operate from a rateable premises. This scheme is a once-off grant and not a commercial rates waiver. This grant is intended to aid firms but is not intended to directly compensate for all cost increases for every business.
My Department, in collaboration with the Department of Social Protection, is also assessing the cumulative impact of forthcoming changes to working conditions, including Pension Auto-Enrolment, Parent’s Leave and Benefit, Statutory Sick Pay, the Additional Public Holiday, the Living Wage, and Remote Working. This follows a recommendation by the National Competitiveness and Productivity Council that a cumulative impact assessment be undertaken. The report is due for publication later in Q4 2023 and will inform public policy in this area.
This Government has adopted an active approach in supporting Irish businesses across multiple crises over the last number of years, including the introduction of unemployment supports during the COVID -19 pandemic, the provision of financial supports to firms facing the implications of Brexit, and more recently, through the period of increasing overhead costs. My Department is fully committed to serving the SME sector and the measures included in Budget 2024 reflect this.
The Government is continuing to monitor the situation regarding the costs of doing business, however no new measures are currently under consideration.
