The Irish Small and Medium Enterprises Association says it would be 'detrimental' in the extreme to depend on increased taxes to address the Exchequer deficit.
In its pre-Budget submission, ISME says that the adjustments and savings must come from cuts in current expenditure. It says that any increases in tax - especially income taxes - act as a deterrent to employment, reduce spending and therefore slow economic growth.
The submission says there is a 'strong argument' to widen the tax base and introduce measures such as water and property charges that will give an element of certainty.
ISME wants the December Budget to introduce policies to support enterprise, including moves to improve access to finance and the introduction of a state-backed lending bank for SMEs. It also calls for incentives to invest in research and development and innovation.
The Association says that the worsening labour market should be addressed by bringing in initiatives on employment retention and the creation and support in training and upskilling programmes. It adds that labour costs need to be addressed by reducing employer PRSI contributions.
ISME also wants to see the Budget set in motion reforms of the pubic sector, by reducing the size and cost of it and also by implementing and monitoring an immediate efficiency drive.
'The emphasis needs to be on immediate cost savings, by concentrating the majority of cuts on current expenditure, mainly through public sector reduction and reform and social welfare cuts with a modicum of tax increases,' commented ISME's chief executive Mark Fielding.
He also said that a stimulus package for enterprise must also be included to get the country working again.
'Confidence will be achieved with a commitment to securing the future through necessarily harsh but prudent budgeting, allied to a business stimulus package,' he added.
