Employers' group IBEC has given a warm welcome to today's budget, but small business body ISME called it 'savage'.
Turlough O'Sullivan, director general of IBEC said the Budget is a credible response to the current difficulties in the public finances. "It sends a clear and positive signal that the Irish government is taking effective remedial action over the next five years" he said.
However, he also said that IBEC would have preferred a greater emphasis on cutting current expenditure immediately rather than on increasing taxation. "Unpleasant though it is for all of us, the increases in income levies announced today are the most effective means of raising revenue with the urgency and simplicity required" he said.
He also said that, on balance, IBEC supports the establishment of a national asset management agency and believes that this measure will further stabilise the banking sector and will help re-establish lending to businesses and households. "It is critical that this is done in such a way that taxpayers' interests are protected.
However, he said that it is regrettable that the supports for enterprise are so modest that they will do little to stabilise employment. "This is a matter which must be urgently addressed" he added.
But small business group ISME described the Budget as 'savage' and a missed opportunity. The group said it would do nothing to stimulate enterprise or help maintain employment.
ISME also expressed concern that tax measures, as opposed to spending cuts, dominated the measures. It said the tax rises would influence the cost of labour and 'could potentially lead to more redundancies'. ISME also criticised increased excise duties on diesel and the increase in the insurance levy. But ISME welcomed the establishment of a national asset management agency.
SFA welcome, but fund 'paltry'
The Small Firms Association has broadly welcomed today's Budget, saying that it should 'give businesses the confidence to reconsider investment decisions that have been postponed due to the uncertainty that has prevailed over the last number of months.'
However, it also criticised the 'paltry' €100m Enterprise Stabilisation Fund announced today, saying it 'would do little to support struggling small businesses in real terms'.
This evening, Chambers Ireland released a statement saying that it hopes that the measures announced in today's Supplementary Budget signal a move towards the restoration of Ireland's confidence and competitiveness.
Director of Policy Seán Murphy said 'The very significant tax increases coupled with the Government's commitment to cost reduction and containment demonstrate that all stakeholders are making a contribution.'
However, Mr Murphy also said that the delivery of the report of the Commission on Taxation is required 'as a matter of urgency' so that the necessary taxation changes - including the broadening of the tax base to incorporate a local property tax - can be made sooner rather than later.
Although Chambers welcomed the establishment of the Asset Management Agency, it said that the decision not to reduce employers PRSI was 'disappointing'. Mr Murphy also said that a reduction in the rate of VAT 'would have raised additional revenue and helped reduce the wide fluctuations in trade and services patterns in the border region arising from currency and VAT differentials.'
IFA says farm incomes will be hit
Meanwhile, the Irish Farmers' Association has criticised the Budget. It said that the increase in the income levy coupled with the cuts in REPS 4, Forestry and the Fallen Animal Scheme will hit farm incomes hard
IFA President Padraig Walshe said: 'Farm income, which fell by over 12% in 2008,and is facing a similar decline this year, have been further hit by the Minister’s doubling of income levies and expenditure cuts.' He added that the doubling of the income levy on gross income unfairly discriminates against farmers and the self-employed.
