As Managing Director of an SME, I hope that whatever government is voted into office will be pro-business and will quickly take decisive steps to ensure that Ireland continues along the path to improved competitiveness which most SMEs embarked on in 2008.
I also hope that the new government will recognise the need for new and existing businesses to survive and thrive as the SME sector has a key role to play in providing much-needed employment and tax revenue if it is given the chance to do so.
Specifically, I would like to see a new government take the following actions within its first twelve months in office:-
1. Instruct the Irish headquartered banks to make a certain amount of funds available to profitable SME’s whose future is threatened by serious cash flow difficulties. These instructions need to be backed up by meaningful sanctions such as withholding of financial support to banks that refuse to assist viable businesses with short term cash flow challenges.
It is nothing short of a scandal that we are seeing profitable SME’s closing because of cash flow difficulties. Many of these companies could have been saved had the outgoing government made it a condition of rescuing the banking sector that these same rescued banks had been compelled to make funds available to viable businesses with cash flow difficulties.
2. Take positive steps to facilitate entrepreneurs to set up new ventures in sectors where there is a reasonable possibility of success. There are openings in the ICT, financial services and medical devices sectors and in the green technology sector which should be actively encouraged.
3. Amend the absurd bankruptcy legislation which unreasonably punishes company directors whose businesses might have failed due to market forces. As well as being unjust this deprives the economy of the expertise of directors who should be afforded the opportunity to get back into business rather than suffering the stigma of being branded a bankrupt for 12 years. As a society, we need to accept that some businesses do fail and business people should not be scapegoated because their companies have had to cease trading. Instead, I would argue that these directors should be afforded the opportunity to learn from their failure and make a fresh start. Changing the bankruptcy legislation would help to remove the unnecessary stigma associated with business failure and this would encourage more people to take the risk of starting a new business.
4. Amend the social welfare rules which punish people whose businesses have failed by depriving them of normal unemployment benefit entitlements– this is an unjust and foolish way to punish people who took risks and provided employment and taxes in the economy
5. In general terms the new government should commit itself to increasing awareness that Ireland needs to have a thriving private-sector in place before it can provide the range full of services citizens have a right to expect in a properly managed economy. It is alarming to hear so many people talking about their entitlements without having any sense of awareness of how these ‘entitlements’ are actually paid for.
6. The process of wage and salary determination needs to be revisited. There can be no doubt that the so-called ‘partnership process’ lost its way in the past ten years and resulted in grossly inflated expenditure which was financed by taxes ensuing from a short term property bubble. It is a scandal that the SME sector had no say in the partnership process – if it had an input I am confident that the high level of pay increases and the notorious benchmarking fiasco would not have been allowed to happen.
7. The new government needs to urgently tackle the issue of government-induced inflation. Two obvious costs is the issue of energy costs where the ESB monopoly and cost structure has to be addressed and also the area of commercial rates where businesses are now paying considerably more money for a significantly reduced service than they were getting ten years ago.
8. The new government should propose a referendum to write an article into the constitution prohibiting any future Irish government from spending more than it takes in taxes. After the austerity that the citizens have had to put up with since 2008 this referendum is necessary so that the country can never be run into the ground again
This list is not intended to be exhaustive but I do think most businesses would be satisfied if the list of proposals was acted on in the next twelve months.
Founder & Management Consultant