High insurance premiums needs to be tackled in order to help small and medium sized businesses recover from the Covid-19 pandemic, according to a report by the SME taskforce.

The 'SME and Entrepreneurship Growth Plan' includes a list of recommendations to assist companies to start up, scale up, enhance their digital capabilities, and increase export activity.

The report states that access to finance is a key barrier to SMEs, as well as competiveness of some of some products and services required by businesses, such as insurance.

Insurance reform

The taskforce suggests dramatically reducing the cost of EL & PL insurance, through measures targeted at the cost of claims and the duty of care.

It also recommends encouraging greater competition in the market, by seeking out additional multinational underwriters to supply the Irish market.

Peter Boland, Director of the Alliance for Insurance Reform welcomed the content of the report, but said its success will be measured by the actions that follow and how quickly they happen.

"We now have 19 reports from the State in the last 4 years which highlight the need for urgent insurance reform," said Mr Boland.

The growth plan was developed by a taskforce of entrepreneurs, business leaders and other individuals, as established under a commitment in the programme for Government.

The Government said the recommendations will be reviewed and taken forward, as appropriate, by an SME and Entrepreneurship Implementation Group in early 2021.

Damien English, Minister of State for Business, Employment and Retail said the growth plan provides the Government with the perspective of the business community.

"I am grateful for the time, commitment and energy that the taskforce members put into developing their collective views so that we can set out to optimise the conditions and resources for Irish SME growth and prosperity into the future," he said.

The growth plan contains a broad range of recommendations, taking their structure from the policy areas which were examined in detail by the subgroups of the taskforce - 'entrepreneurship', 'productivity, digitalisation and competitiveness', 'internationalisation' and 'clustering and networks'.

EIIS reform

Scale Ireland, which represents tech start-up and scale-up companies, welcomed a number of measures contained in the report, including proposals to reform the Employment Investment Incentive Scheme (EIIS).

The Chair of Scale Ireland, Brian Caulfield, who is a member of the taskforce, said he believes this would significantly incentivise private investment into indigenous tech start-up and scale-up companies.

"I strongly endorse the report's recommendations, particularly, in relation to supporting high-potential start-up and scale-up companies which have huge export potential," he said.

Mr Caulfield said Scale Ireland also welcomes the proposal to reduce the CGT rate to 20% for founders, private investors, VCs or Angel Investors who invest in non-property SME

"If many of these recommendations are implemented, it would be a real game-changer for the sector and the country in terms of innovation, employment and entrepreneurship," he said.

Digitalisation

The report states that the Government must do more to encourage digitalisation, by fully digitalising its own services and supporting SMEs to do the same.

It said the National Broadband Plan and 5G rollout present "important opportunites" for SMEs, and recommends "appropriate" roll-out of broadband and 5G.

Caitriona Allis, Head of Association of Chartered Certified Accountants Ireland, welcomed the publication of the report.

"This report is not only timely but vital to provide SMEs with stability in what will be a more digital and sustainable focused future," she said.

"We welcome the Government's commitment to provide a strong platform for SME growth, not only to recover from the challenges of the pandemic and the disruption of Brexit but for long term viability and prosperity," she added.