Irish SMEs call for ‘IDA-style’ agency to fix crisis

Two major business groups representing small business owners say it is time to set up an “IDA-style” government agency to look after the interests of Irish SMEs.

In a rare joint initiative, business group Isme and Retail Excellence Ireland, which represents the interests of 1,600 retailers around the country — have submitted a document to Fine Gael, Fianna Fáil, and other parties raising concerns about the course of government policies for business.

Amid marathon inter-party talks about forming a new government, the business groups want to influence a future administration because they believe Irish SMEs are being treated unfairly. They are due to meet Independent TDs today.

The joint submission reflects growing concerns among SMEs that policies are skewed to helping foreign-owned multinationals, leaving indigenous SMEs in the shade. It is unusual for rival business groups to link up to submit proposals, and this may be a sign that other joint initiatives will follow.

“Relatively stable and focused” government policies helped boost the economy, but external factors such low-interest rates, cheap oil, and a competitive euro against sterling and the dollar have provided a bigger boost. The document cites the role of the IDA in attracting foreign investment, and that of Enterprise Ireland (EI) in helping small start-ups.

However, Isme and Retail Excellence Ireland say an agency specifically to promote Irish SMEs is needed and small businesses can no longer rely on a junior minister to hear their concerns.

“It must now be time to consider a progression in our national enterprise policy by creating a new state agency that will be tasked with the objective of sustaining and developing business in Ireland, being those entities that are not advocated for by IDA or EI,” the groups say.

The SME agency would require no big budget to boost “business in Ireland, for the long-term benefit of Ireland’s economy and society”.

“Given that much business in Ireland is effectively family business, it is critical that we start thinking more strategically about multi-generational family business, the bedrock of Germany’s economy, the bedrock of the EU,” says the submission.

“We can start by creating and celebrating a family business day, as they do in Germany every June,” the document says.

The business groups claim there is an “entrenched view” in government that focuses on the self-employed merely “an exchequer cash cow”.

A new government needs to focus on the costs of doing business in Ireland,including insurance,commercial rates, high energy and waste costs, business services costs, and credit and labour costs, they say.

Central Bank research last week showed Irish SMEs pay by far the highest interest costs in the eurozone for their business loans.

Despite ECB funding costs falling close to zero, Irish SMEs last year paid an average interest rate of 5.8%, more than the 5% paid in Cyprus, while Austrian banks charge their SMEs as little as 2.2%.

They also say raising the minimum wage will affect wages and business costs for all employees above the minimum level.

And the business groups want major changes to the public procurement regime, which they say “ranks among the weakest in Europe for transparency and clarity”.