State bank will aid ‘20k new jobs’

The head of the Small Firms Association, AJ Noonan, says a state investment bank is crucial to creating 20,000 jobs in 2014.

Mr Noonan said that the right policies will unleash a wave of job creation as small businesses benefit from the fragile growth in the broader economy. “Ireland’s small business sector is deeply embedded in the Irish economy; it is now time to put jobs and small business at the centre of everything,” said Mr Noonan. “With the right environment small businesses in Ireland will generate 20,000 jobs.”

One of the key problems still facing small businesses is access to credit. The banking sector in Ireland lost two banks this year, with ACC and Danske Bank closing for new business in Ireland. Mr Noonan said that any further shocks to the system could derail the economic recovery.

“The banking system in Ireland is shrinking in terms of credit providers,” he said. “We need a state investment bank, that is not burdened with the baggage of the financial crisis. The legislation is there for the creation of an ACC or ICC-style bank; we are reinventing the wheel.”

Fixing lending institutions is one of the key initiatives to unlock the job creation potential in the small firms, along with improving access for SMEs to public procurement contracts and reforming the social welfare system and lowering the cost of employment.

Mr Noonan said that about 4% of social welfare recipients “can’t afford to work”. He called on the Government to create a social welfare system that is fit for purpose, that supports people well in the first few months after they have lost their jobs, and then reduces their payments substantially in order to incentivise a return to work before they lapse into long-term unemployment.

While Ireland is known for having a generous tax regime for multinationals, he said that the tax rates for self-employed people is well above average.

However, despite the obstacles facing small businesses, they still employ 655,000 people and are seen as one of the key elements in returning the country to sustainable growth.

“Given the right conditions the small businesssector will create jobs and overcome our debt burden,” said Mr Noonan. “Small business can lead the way in helping Ireland to recover faster and stronger.”