Irish Exporters Association response to Budget 2018
The Irish Exporters Association, the voice of the Irish industry, today welcomes Budget 2018 delivered by Minister for Finance, Public Expenditure and Reform, Paschal Donohoe.
Commenting on today’s Budget announcement Simon McKeever, Chief Executive of the Irish Exporters Association stated: “The Irish Exporters Association welcome the increased investment across health, education, housing and public transport as these are all areas that will increase our competitive position globally. The increase of €790 million in capital spending shows that this Government is serious about increasing investment and this brings us up quite a bit by international standards.
The establishment of the Rainy Day Fund with at least €1.5 billion transferred to it from the Ireland Strategic Investment Fund and annual contributions of €500 million is an important step to insulate us from global uncertainties, including but not limited to Brexit.
With regard to Brexit, we welcome the introduction of the small “Brexit Loan Scheme” which may assist small and medium business in Ireland with short term working capital. However, there is no real clarity around the scheme yet and we look forward to seeing the implementation procedures and hope that the conditions of the scheme will help those hardest hit. We particularly welcome the increased funding to the Department of Foreign Affairs and Trade and the Department of Business, Enterprise and Innovation and the increased support for Bord Bia. As long as this funding is spend in market, this will be money well spent because it is an absolute necessity that we diversify our export markets. The extra €64 million to the Department of Agriculture as a specific allocation for Brexit response measures will hopefully help the agrifood sector against what is coming down the line. However, in the face of the significant threat that Brexit poses to our economy it is our view that these measures are the bare minimum the Government needs to do. The implications of potential customs and import VAT being imposed on Irish/UK trade are a potential tsunami – this is just a start!
The IEA understands that a significant programme of reinvestment is needed to address demographic challenges and for the government to continue to deliver a steady stream of quality graduates to meet national economic and societal objectives. Given the high proportion of graduates in the Irish workforce, employers are major beneficiaries of the outcomes of Higher Education and we note the levy paid by employers toward the National Training Fund being increased. Would it have been better to incentivise this through the tax system? Given that employment levels have been showing such strong growth and are set to near full employment next year with Irish employers currently experiencing a skills shortage, the IEA would have hoped to see a restructuring of the National Training Fund to increase training opportunities for those in employment to upskill.
The IEA welcome the very small moves in taxation measures but there is still a huge amount more that needs to be done to maintain our competitiveness at home and internationally, particularly when you consider the personal income tax bands in the UK and that some Irish companies are already assessing where to position staff.
The IEA are very disappointed with only a €200 increase in Earned Income Credit for the self-employed, this Budget was the perfect opportunity to match equality between PAYE and the self-employed sector. Levelling the playing field between PAYE workers and the self-employed is an issue that has been long overdue. Ireland needs to have a taxation system that does not penalise the risk-takers who drive the economy and create employment, we need to reward entrepreneurs and not propagate a potential barrier to business development and we feel that this was a missed opportunity.
The introduction of a share based incentive scheme is very welcomed, especially in the start-up sphere as this will really assist them in competing with multinationals for talent by profit sharing.
The IEA look forward to the contributing to the consolation on the final draft of the National Planning Framework and seeing what the final plan has to offer with regard to the development of infrastructure and stimulating economic growth across the country. Regional Ireland has not seen the benefit of the upturn in the economy to the same extent as urban areas and strategic investment will see these gains spread out more evenly.”