Smalls firms seek commitment from State agencies on bills

STATE agencies like the HSE and local authorities will be asked to commit to paying their bills within 15 working days, following a meeting between the Small Firms Association (SFA) and the Minister for Small Business John Perry.

Minister Perry is also actively considering SFA suggestions such as a review of local authority charges, a government-backed loan guarantee, the freeing up of banking credit, a new strategy to encourage entrepreneurship from schools level up, a reduction of the regulatory burden with a review of bankruptcy laws, and a revenue-neutral plan to allow small firms reinvest their profits from here to 2013 to grow their businesses and sustain jobs.

Minister Perry said: “The decision alone to have a Minister for Small Business shows the importance of this area to the economy. The focus for the last 10 years has been all about foreign direct investment. My focus now is on kick-starting the local economy, making banking credit available and building confidence from the ground up.

“There were commitments made with the recapitalisation of the banks. We now need to follow through on the three principles behind the bailout. The banks need to invest in small business to ensure the retention of staff and to boost job creation. The banks need to fulfil their obligations.

“Small businesses, those with up to 50 staff, employ 900,000 people in Ireland. The total number for IDA and Enterprise Ireland-backed companies comes to only about 270,000 directly employed. The Taoiseach has made it clear that the small business sector is our main economic recovery.

“We want to recognise the job-creating entrepreneurs, the risk-takers who have re-mortgaged their homes. We have a new mind-set on the domestic economy. We are meeting the SFA, ISME, the chambers and everyone who is working to create jobs and reboot the local economy.”

Small Firms director Patricia Callan said the minister responded very positively to the SFA’s pro-job suggestions. Crippled by its EU/ECB/IMF bailout commitments, the Irish Exchequer is also painfully aware of the 13,400 redundancies to-date in 2011, with an average of 1,300 jobs were lost every week so far this year.

Of these, 2,484 were manufacturing jobs.

Minister Perry promised to give immediate attention to a review of bankruptcy laws “to give a second chance to honest entrepreneurs”, to review public procurement processes, reducing red tape and administrative burdens on SMEs, and to extending the 15-day prompt payment requirement to state agencies to assist SME cash flow.

On this subject, SFA’s Patricia Callan noted: “We want Government agencies to pay their bills within 15 days. The HSE and the local authorities are the worst offenders. If they can pay promptly, it will send out a strong message to other businesses and improve cash flow in the local economy.

“We also want a government-backed loan guarantee. It is also very important to keep costs down in the current environment. When costs rise in local authority charges, energy, fuel and transport, businesses tend to reduce employee numbers. We want the Government to cut those costs which are within their control. We need to be more competitive.

“We also have ideas about job creation. The present suspension of corporation tax in the first three years of a start-up business is a good idea, but few start-ups have profits in those early years in any case.

“It would be more useful to allow all small firms to reinvest their profits within the company. This could run along similar lines to the Government’s idea of cutting PRSI until 2013.”

Minister Perry is giving serious consideration to these suggestions.

However, he was more resistant to the SFA’s call to reduce the minimum wage for new entrants to the workforce. Fine Gael has stated its commitment to retaining the present minimum wage level.

“We differed on the issue of the minimum wage,” said Patricia Callan. “We are not talking about people who are already in jobs. We want the rate lowered to create new jobs. That would give the decision back to the marketplace. People could either agree to gain the experience or stay unemployed. Employers are not going to pay the same rate to a school leaver as they will pay to an experienced person.

“The minister gave a more positive response to our suggestion of a national entrepreneur strategy. Going forward, we will need more risk-takers to create jobs. We need an overall Government strategy to promote an entrepreneurial culture. This requires a forward-looking approach to supporting these people.

“We would also like to see a review of the bankruptcy laws. In the US, a business person who fails at the first attempt is seen as having gone through a learning experience. Here, the same person is just seen as a failure.

“The minister understands the need to review laws on bankruptcy, labour regulations, licensing, waste management and company law. Having a minister to champion the cause of small businesses really has given the sector a voice.”