ISME: Maintenance of Croke Park Agreement 'a nonsense'

The Irish Small and Medium Enterprises Association has given a guarded welcome to the Government’s National Recovery Plan.

ISME described the plan as "challenging" but welcomed the fact that a future blueprint has at last been outlined.

There is concern in the associstion, however, at the lack of "fresh ideas" in a muted business stimulus package and that little detail has been provided on proposals outlined.

The association welcomed the fact that the majority of adjustments will come from cuts in current expenditure.

While the decision to widen the tax base and introduce measures, such as water and property charges, will "provide an element of certainty" to future tax revenues, they are concerned that the level of income tax increases "will act as a deterrent to employment creation and maintenance, reduce spending and slow economic growth".

The association said: "The decision to reduce the social welfare budget and the minimum wage, while regrettable, is unavoidable, due to the significant costs for the state and the negative impact on the labour market.

"The commitment to review the Joint Labour Committee and Registered Employment Agreements is long overdue.

However, the association said the decision to maintain the Croke Park Agreement "is a nonsense" and represents "a missed opportunity" to address the costs of running the public sector once and for all.

They said: "The significant cuts in private sector pension reliefs is a mistake, which will only put further pressure on employers’ wage costs and will reduce the level of retirement savings by private sector employees."