The organisation representing family-owned businesses has called for the establishment of a new state agency to facilitate the development of firms in the domestic economy.

The Family Business Network says the agency would be equivalent of IDA Ireland.

But it would be solely focused on scaling-up the potential of family-owned and operated firms so they can become the main drivers of economic recovery and job creation.

It makes the proposal in its pre-budget submission at a time when it says Ireland's Foreign Direct Investment (FDI) model faces increasing challenges.

The network also calls for the introduction of a new rates scheme which, as it puts it, does not discriminate against local family businesses in favour of large online retailers.

The submission also contains a proposal to reduce the Capital Gains Tax (CGT) from 33% to 20% for at least two years.

This, it says, would facilitate investment in indigenous companies who contribute 80% of Ireland's economic value.

"Through the measures we're recommending today, family businesses can be the driving force of Ireland's recovery," John McGrane, Executive Director of the Family Business Network, said

"But it is vital that recovery is not obstructed by a failure to address issues like planning reform or by tax increases that could hinder the success of local family firms who employ close to one million people in Ireland," he added.