A campaign calling for immediate and essential reform in the key areas of the national minimum wage and taxation has been established, which includes ISME and a range of other trade and employer representative organisations.
It is also seeking recognition for SMEs and employer representation at the Labour Employer Economic Forum (LEEF) and on the Low Pay Commission.
Among those organisations who have initially signed up to the campaign are ISME, the Irish Hairdressers Federation; Restaurants Association of Ireland; Irish Hardware Association; Nursing Homes Ireland; Hair and Beauty Industry Confederation; Vintners’ Federation of Ireland; Convenience Stores & Newsagents Association; Restaurant Association of Ireland; Music & Entertainment Association of Ireland; and Retail Excellence.
‘Breaking Point’
Neil McDonnell, Chief Executive, ISME, said: “The Draghi Report on EU competitiveness, which was published last week, stated that more than half of SMEs in Europe flag regulatory obstacles and administrative burdens as their greatest challenge. This is a clear wake-up call for the Irish Government which needs to recognise that while small employers are the backbone of the Irish economy, many are close to breaking point with the amount of extra cost and regulatory burden imposed on them.”
National Minimum Wage (NMW) Reform
The way in which we consider changes to the minimum wage must change. Calculation of the minimum wage must reflect the fact that 48% of the workforce are employed by public service or multinationals, which enjoy far higher wages than the rest of us. At a minimum, public sector pay must be disregarded from calculations. Future increases in the NMW must not exceed the Consumer Price Index (CPI).
Tax Reform
Meaningful tax reform has been postponed for too long. We will rarely have a better time to address it. We want to see the following:
The 8.8% rate of PRSI must apply to the entirety of the National Minimum Wage, currently €495.30 per week. (The SME Alliance understands that Government has accepted this Alliance recommendation for Budget 2025);
The food service and grooming sectors require the permanent establishment of a 9% VAT rate;
Our 23% standard VAT rate is too high and should revert to its historical 21% rate.
Industrial Relations Reform
The manner in which Government engages with employers is flawed. SMEs employ 68% of the active workforce, which totals 2.3 million people, but they have no representation in industrial relations matters with Government.
We require pro-rata representation on the Labour Employer Economic Forum (LEEF) and on the Low Pay Commission.
All legislation affecting labour and overhead costs for SMEs must be subject to the SME Test and regulatory impact assessment – as is required by Irish and EU law.
For further information, visit www.smealliance.ie
