Budget 2014 Must Support Increased Demand and Confidence

Budget 2014 Must Support Increased Demand and Confidence

Strong Focus on SMEs Required 

Wexford Chamber has said that the core focus of Budget 2014 must be to set the right conditions to improve demand and encourage consumer spending through a strong focus on supporting SMEs.

Fleur Creed, Wexford Chamber President  said, “This budget is an opportunity for the Government to support the economy by facilitating better conditions for business that will ultimately sustain and create jobs. After a peak to trough decline in demand of 20%, the highest in the Eurozone, an increase in demand will stimulate growth and employment and build consumer confidence.”

The best way to achieve this through Budget 2014 is by introducing no new taxes beyond those already announced. The sooner the Government gives certainty on this issue, the more likely we are to see the positive effects. Budget 2014 can also ease the burden of accessing working capital for business by raising the qualifying amount for cash accounting. Better promotion of the Seed Capital Scheme for start ups and reform of the Employment Investment and Incentive Scheme will also increase usage from currently very low levels.

Chambers Ireland have outlined three key areas which the Government should focus on in Budget 2014 in order to increase demand. These are:

  • Taxation: Government must give assurances that there will be no more tax increases beyond those already scheduled. It is essential that both the 12.5% corporation tax rate and the 9% hospitality rate are maintained. These measures will give certainty to business and consumers and create the sort of confidence on which the economy can grow.
  • Supporting micro, small and medium-sized enterprises: It is younger and newer companies that are responsible for the greatest levels of job creation; therefore, it is essential that they receive significant support. Government should introduce targeted measures to increase working capital in SMEs and in turn the velocity of money in the economy. Raising the qualifying amount for cash accounting to €2.5 million and delivery of the e-payment agenda would support an improvement in working capital for businesses at little cost to the State.
  • Spending: While recognising that it is not the role of Government to create jobs but to create the right environment for job creation, we call for targeted spending in a limited number of areas that can stimulate the economy and result in job creation and retention. Ireland must have an infrastructure and workforce ready to capitalise on any uptake in the economy in the future.

The submission outlines an extensive range of recommendations on taxation, Government spending and support for enterprise. The full submission is available here.

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