Employers group Ibec has outlined extensive proposals for new emergency liquidity and cashflow measures worth around €30 billion that it says the Government needs to implement in order to help businesses survive through the Covid-19 emergency.
The plans include a range of loans, credit guarantees, tax and rate deferrals and crisis cash payments that the organisation says are required to keep many companies afloat.
"At its core, liquidity challenges are very severe for our indigenous sector in particular and are a significant risk to their future unless we address it," said Fergal O'Brien, Director of Policy and Public Affairs at Ibec.
The body said what the Government has announced so far has been positively received by businesses.
But Mr O'Brien said more is required around credit and liquidity because "in this area we are significantly behind best in class in Europe"
Average liquidity support across the EU27 stands at 16% of GDP, but in Ireland it is 0.1%, Ibec stated.
It said that credit conditions are very challenging and liquidity has dried up for many firms.
Among the proposals are a €2 billion state-funded zero interest working capital fund, as well as 12 months zero interest loans on state supported schemes.
It also wants an Irish Strategic Investment Fund commercial paper purchase programme of €2 billion.
The SME credit guarantee scheme should be extended to cover re-financing, Ibec said, adding that a new export credit insurance scheme needs to be introduced.
In a proposal that may prove controversial, Ibec said there should be tax deferrals for at least three months for businesses that need it and a six month local rates holiday - with a further six month deferral after that.
It also wants a crisis cash payment for SMEs to a maximum of €15,000 to be delivered through a Revenue payment model.
The total cost of this to the Exchequer would be around €5.9 billion gross or 1.6% of GDP, or €3.9 billion net when loans have been paid back.
The move would unlock €26.4 billion in liquidity in the economy, it estimated, or around 7.5% of GDP.
The Minister for Finance said the government is already considering additional measures to help businesses with cash flow difficulties.
He said that last week the Minister for Business, Enterprise and Innovation had confirmed a set of loans available to companies which could provide additional funding to them at very low interest rates.
But he acknowledged that more is needed.
"Myself and Minister Humphreys are now considering additional measures that we believe may be necessary to supply additional lending directly to companies across the coming weeks."
He added that he hopes to be in a position, with the consent of Government, to outline additional measures that may be needed in that area soon.
Ibec pointed out that with EU state aid rules on hold, we can do things we would not otherwise have been able to.
Mr O'Brien said the measures are needed within weeks, if not days, for some firms.
Finance Minister Paschal Donohoe has said the Government is already considering additional measures to help businesses with cash flow difficulties.
He said that last week the Minister for Business, Enterprise and Innovation had confirmed a set of loans available to companies which could provide additional funding to them at very low interest rates.
But Mr Donohoe acknowledged that more is needed.
"Myself and Minister Humphreys are now considering additional measures that we believe may be necessary to supply additional lending directly to companies across the coming weeks," he stated.
He added that he hopes to be in a position, with the consent of Government, to outline additional measures that may be needed in that area soon.
