Still not yet springtime for Ireland’s small businesses
It’s not much of a stretch to understand the frustrations of the small business owner, constantly being asked for a little piece — an insurance premium rise, a small pay increase, a rate rise.
To the SME owner, the cumulative effect of these little pieces can be terminal. Most SMEs can take a hit in one part of the cost base, very few can sustain hits across it all. Unfortunately for the SME owner the economy, although recovering well, is at an uncertain point. Unemployment is at its lowest level since 2008.
Our population level is at its highest level since 1851. The pressure to house and employ our population has not been higher in living memory. Our largest trading partner is leaving the EU.
In the SME sector, which employs 920,000 people, many businesses, especially retailers, await in fear the call from the landlord on their rent review.
With so many of our shopping centres now in the hands of vulture funds, and with the ban on upward-only rent reviews (UORRs) only applying to those signed from March 2010, long-standing tenants are being advised of rent hikes.
We believe the rent controls, successfully introduced in the private rental sector by Minister Coveney last year, give lie to the notion that ending UORRs is unconstitutional, and he should act before there is carnage in the commercial rental sector.
The Valuations Office is conducting a review of commercial rates country-wide. Irish Small and Medium Enterprises Association understood this process to mean some rates would go up a little, some down. But in many local authorities where revaluations have taken place rates for SMEs have shot up, in some cases by more than 100%.
At least part of the reason for this seems to have been a reduction in rates for large utility providers. But just because some large businesses might have had overpaid rates in the past, it does not logically follow that small businesses were under-paying. It just means the system was wrong.
Last year the High Court awarded €40,000 to a hill walker who cut her knee on the Wicklow Way. Although subsequently overturned for technical reasons, the state still had to pay its own very substantial legal costs.
More recently, the High Court awarded a restaurant customer €20,000, raising by €2,000 a Circuit Court award, because a waiter withdrew a chair for her to sit on. The High Court recently awarded a hotel worker €77,000 because he suffered a cut to his finger from broken glass while sorting till receipts.
One wonders if judges consider the costs of this type of award. Not just the financial cost, or the increased insurance premiums. We mean the unreasonable demands on teachers to prevent injuries in the schoolyard; the requirement that everything, down to making a cup of tea in the office must be covered in the safety statement; the fear of parents when they invite children to a birthday party with a bouncy castle; the need to cover every inch of (dry) linoleum in public buildings with ‘Caution- Wet Floor’ signs?
All have a toxic, corrosive effect on our domestic and work lives. But the Department of Finance’s 33-point plan will not meaningfully reduce the cost of insurance because, crucially, it does not propose to legislate controls of judicial discretion on the setting of awards, and it does not suggest the introduction of a law on perjury, which would crimp a substantial number of fraudulent or exaggerated claims.
The Oireachtas farce that is water charges is drawing to a close. All we’ve been talking about for two years is how we’re not going to pay for water, rather than how we are.
For the SME sector the issue is simply how much we’re going to pay in increased commercial charges or in increased personal taxation. It really is past time businesses stopped talking about our out-of-control national cost-base; it’s time to do something about it
