Business groups, employers and unions have been reacting to the contents of Budget 2014.
Ibec:
Business group Ibec has said that the size of the Budget adjustment was correct, however it imposed too many new taxes and costs on businesses.
It said the excise rise would push business to Northern Ireland, while the retention of the pension levy was a major disappointment.
Ibec also said the lower rate of employers’ PRSI and changes to sick benefit would make it more difficult for businesses to increase jobs.
However the group did welcome the measures for small businesses and entrepreneurs, including capital gains tax changes and the Employment and Investment Incentive Scheme.
IFA:
President of the Irish Farmers Association John Bryan has described new funding for some farm schemes as a positive first step for the sector.
Budget 2014 includes a number of farm-related changes, including an additional €23 million for the country’s suckler herd, a slight increase in the VAT rebate available to farmers and extension of the capital gains tax relief to those who want to dispose of land they have held on long-term leases.
However Mr Bryan said that the review of schemes and reliefs available in the industry was of “serious concern” and the association would “work to ensure that all reliefs are maintained”.
SFA:
The Small Firms Association has said the Budget offered a mixed bag of results for businesses in the country.
It said the increase in the lower rate of PRSI, and the introduction of other charges, would impact the domestic economy.
The firm’s chairman AJ Noonan described the extension of the pension fund levy as “just a further money grab of the schemes which are already under serious pressure”, while he also said the bank levy could affect small firms if the cost is passed on to business.
However Mr Noonan welcomed the announcement of schemes to encourage entrepreneurs and start-ups, as well as changes aimed at encouraging investment.
The firm was also positive about the retention of the 9% VAT rate for hospitality, which it said would support the industry against the backdrop of a fragile economy.
ISME:
ISME has welcomed Budget measures aimed at helping smaller businesses and start-ups to grow, which it said was vital in encouraging job growth in the years ahead.
The body also described the cuts in some social welfare rates as necessary, as it would make employment more attractive to those currently on the dole.
It welcomed the retention of the 9% VAT rate for the tourism industry, while it was also positive about measures that would help improve cash-flow and incentivise investment in businesses.
However ISME said the change in sick pay would put extra pressure on SMEs, describing it as a “not so subtle attempt to transfer social insurance responsibility from the government to employers”.
It also said the bank levy would inevitably be passed on to small businesses, while it was critical of the Government’s decision not to extend PAYE tax allowance to company directors.
Construction Industry Federation:
The Construction Industry Federation said the Budget “set the foundations for a recovery” in the sector.
CIF director general Tom Parlon said the sector was “on the verge of a recovery” and measures announced today would help accelerate that.
They include a tax incentive scheme for home renovations, a number of new capital investments and measures to combat the so-called shadow economy.
Mr Parlon said that a large proportion of those on the dole come from the construction sector and CIF has argued that it offered the best opportunity for quick job creation.
“The Government has been taking that point on board and they have proven that today”, he said.
Chambers Ireland:
Ian Talbot, chief executive of Chambers Ireland, said the Budget was largely positive for businesses in the country.
He said the Home Renovation Tax Incentive scheme, the retention of the 9% VAT rate for the tourism sector and the change to the cash receipts threshold for VAT would all be beneficial to businesses.
“This budget has been one of the most positive for business in recent years and we are glad that the Government has accepted that recovery will be achieved through job creation and support for business,” he said.
However he said it was a “real disappointment” that six pay costs to employers were to increase, and the measure would see companies putting off new hirings for as long as possible.
Chartered Accountants Ireland:
Brian Keegan of Chartered Accountants Ireland said the success of Budget 2014 will be determined by its effect on the job market.
Mr Keegan said the retention of the 9% VAT rate for the tourism industry was a positive, while changes to the VAT treshold for SMEs - and introduction of a tax holiday for entrepreneurs - would help improve the business environment.
He said the rise in the higher rate of DIRT was a significant change, but it could result in people investing in the economy in order to reduce their tax bill.
He said this increase, along with the affect of the full year's Local Property Tax and excise duty increases show that the minister is raising funds in a way that could be collected as quickly as possible.
It remains to be seen whether the measures - including the bank levy - would help foster job growth and job retention, he said, and it was on that basis that the Budget would need to be judged.
Retail Ireland:
Retail Ireland has welcomed measures aimed at tackling the black market, however it said the rise in excise duties was “unwise”.
The Ibec group said the retention of VAT rates and the holding of fuel duties were positive, however the excise increase would negatively impact responsible customers and reduce spending.
It said the black market was costing the state hundreds of millions of euro every year, and so any measures designed to tackle them were welcome.
