New enterprise minister must address high costs, business groups urge

'Employers are not able to meet employees' expectations of covering high costs through wages, so Government is going to have to deliver on cost,' said Isme chief executive Neil McDonnell

Peter Burke, a trained accountant, was offered the role of Enterprise Minister following a cabinet reshuffle. Picture: Maxwells

Freshly appointed Enterprise Minister Peter Burke will come under pressure to address the growing wage costs facing small firms, warned a business representative group.

Isme chief executive Neil McDonnell said small enterprise was being "squeezed" when it came to balancing costs and prices and Mr Burke will need to “step back from this data and ask why is this happening”. 

“Employers are not able to meet employees' expectations of covering high costs through wages, so Government is going to have to deliver on cost,” said Mr McDonnell.

Mr McDonnell also said full employment should lead to many more new market entrants and competition, which he said was not happening due to landlords exiting the sector.

“I think if the minister is willing to critically challenge his own officials in enterprise as well as those in finance he will get some of the answers and hopefully we’ll see some output in Budget 2025,” said Mr McDonnell.

A separate organisation, the Small Firms Association (SFA), echoed Mr McDonnell and called for Government policies from the Department of Enterprise to “curb business costs, ease the tax burden and provide upskilling support”.

"The new administration has an opportunity to renew its focus to support small businesses which have been hit with unprecedented economic shocks in recent years," said SFA director David Broderick.

Small firms account for 98% of the total number of businesses in Ireland, according to the SFA.

Mr Burke, a trained accountant, served as a junior minister for European affairs and at the Department of Defence before taking up his new senior role following a cabinet reshuffle by Taoiseach Simon Harris.

Meanwhile, chief executive of the Irish Tourism Industry Confederation Eoghan O’Mara Walsh is hopeful the tourism brief will eventually transfer to the Department on Enterprise Trade and Employment in the near future.

“Cost of doing business, capacity challenges, Vat are crunchy economic issues,” said Mr O’Mara Walsh.

He added while it may not be possible to move tourism into Mr Burke’s remit at this point in time, he hopes changes to a manifesto ahead of a looming general election will make this possible.

“Fáilte Ireland and Tourism Ireland are the State agencies for tourism and they should sit alongside Enterprise Ireland and the IDA and all of those job creation agencies,” said Mr O’Mara Walsh.