ISME, the Irish Small and Medium Enterprises Association, has called on the Government to freeze all of its costs imposed on business for one year and for a pay freeze across all sectors, to help regain some of the competitiveness lost in the last six years.
While inflation figures remain low, the Association is concerned that any gains in productivity will be lost through price and wage inflation.
According to ISME Chief Executive Mark Fielding, “even with a slight improvement in our competitiveness, there is still a long way to go to regain previous levels. Many existing SMEs find it extremely difficult to profit from any productivity increases or cost reductions because of legacy leases, long term agreements and old wage rates”.
“Ireland is still a high-cost location and we need a national campaign to drive down the costs for everyone. Business accepts cost reduction as part and parcel of management, while Government and their public servants have proven to be squeamish when it comes to cost curtailment. SME business must continue to take the lead and impose a one year pay freeze, as a start.
Government must also take the appropriate actions to reduce their own cost and enterprise and consumer costs, in relation to energy, government charges, legal services and exporting. The focus must be on maximising privatisation of the state sector where appropriate and removing barriers to competition in sheltered sectors. Vital to this are the range of actions outlined in the Action Plan for Jobs and a more urgent and realistic approach to ‘Croke Park’ savings.