ISME calls for public wage freeze

ISME, the Small and Medium Enterprises Association, wants the Government to introduce a public wage and hiring freeze as business confidence hits an all-time low.

However, ISME is calling for key infrastructural projects, essential to stimulating growth, to proceed and a reduction in business costs by freezing local charges and reducing the incidence of stealth taxes

ISME chief executive Mark Fielding believes tackling public sector pay, which remains a significant strain on exchequer finances is a priority and needs to be “reined in” with proper, verifiable and measured procedures introduced, including a 12-month pay pause and a two-year recruitment ban.

“The public sector cannot be allowed crowd out the productive private sector, as this would ultimately undermine economic activity and lead to further job losses, a threat that does not affect those presently working for the state,” he said.

Mr Fielding also cautioned the minister not to fund any potential shortfall in expenditure through increased taxes, in particular further indirect and stealth taxes.

“ISME is concerned that these charges, in particular local charges, will increase as a consequence of reduced central government contribution to local authorities’ budgets due to the national government savings target of 3%. In other words, once again businesses will be expected to pay for the reduction in local authority revenues, through increased commercial rates, water charges, and waste charges amongst others.

“Any increases in these areas will be unsustainable. While business continues to pay its fair share, we take serious issue with constantly having to make up the shortfall in local authority budgets, brought about by central government cutbacks,” he said.

ISME, he said, accepts that while there will have to be an element of borrowing, it is crucial that we not attempt to borrow ourselves out of a recession, with the obvious consequences.

“We cannot have a knee jerk response that would bring short term respite at the expense of long term benefit. It is imperative that the minister does not introduce policies that discourage enterprise and send out the wrong messages to the business community, whose business decisions are being made on the back of the greatest level of economic uncertainty seen in over two decades,” he said.

Mr Fielding said the cost environment is having a devastating impact on the competitiveness of SMEs.

“It is imperative that initiatives are introduced in this year’s budget to prevent further cost increases and ensure that business is given a period of respite,” he said.