As the dust settles, Kehlan Kirwan looks at Budget 2015, and what it may mean for Irish small businesses
The intention of Budget 2015 was to make sure that most people felt money was staying in their pockets rather than haemorrhaging as a result of further government money gathering. The exercise worked.
Over the ensuing days of review, it became apparent, that for the first time in seven years, people seemed upbeat about what the budget had to bring. and 2015 was going to be a year to extend the belief that Ireland is heading incrementally in the right direction.
This idea was cemented by allowing the low-hanging fruit of petrol, diesel, motor tax, and alcohol to go untouched. It seemed that Finance Minister Michael Noonan and the Government were in a particularly generous mood.
A country of workers weary of austerity could now see that there may be an end to all the moneygrabbing and that perhaps hanging on by our fingernails has delivered some, if not a lot of, reward for that.
However, if you claw through the headlines to the other side, was this as good a budget as we’re being led to believe?
Water charges will put paid to any decrease in income tax and if you’re self-employed the incentive for success is questioned again. The reward for building your company is that you’ve been singled out to pay more out on the universal social charge.
The Government has always espoused the idea that they want to support and drive the small business sector, yet time after time opportunities to do so have been missed.
Over the past number of budgets, the Government has failed to support their statements by developing a tax system designed to support the SME owner.
PAYE workers are still entitled to additional tax credits over and above a self-employed person. PAYE workers get support from the state if they can’t find a job. No such support exists for the self-employed.
In this budget, we saw the SME owner singled out yet again. Your reward for your hard work and being a successful business owner is that you will now be paying 3% more than your PAYE counterparts on the same wage.
Of course, many will argue that it applies to the higher end of earnings but there is much more to it than that. Business owners are creating employment, getting money into the local economy and being asked to pay more tax than their PAYE counterpart.
Then, if their businesses go to the wall, they’ve effectively been told ‘you’re on your own’.
The Government’s mantra is that it will support SME owners, but rarely help them, which has to change.
Also lingering in the background are water charges and the household tax. With no real indication on the size of those bills over the next five years, it’s hard to see huge benefit from this year’s budget.
Water charges will almost certainly go up over the next five years and the household tax is set to follow suit. That, combined with household utilities and their ever increasing rates, means there are still a difficult number of years ahead for everybody.
But, right now, it seems appropriate to take a short time to bask in what can been seen as the beginning of the end for austerity budgets. It’s been a long time coming and the feeling that Ireland is gaining a foothold in the domestic economy is most certainly there.
The main shopping streets are seeing businesses opening again and consumers are growing in optimism too.
Exports have never been better and the demand for Irish-made products, from food to technology, is continuing to grow. Through global stagnation Irish companies are finding success and flinging open the doors to a world which has warmed to how we do business.
From female-focussed products on sale across the Middle East to family farmed crisps in central Europe, Irish business owners have developed a knack for getting to the right places. We’re a small island in a big world and that’s our biggest strength.
At the heart of this has been SMEs, which have dealt with a lot in the recession years. Some have seen their business go under, others have seen them boom. What cannot be denied is that small business has been key to the recovery and will continue to be.
Many obstacles still face the sector and those should not be made light of in the face of renewed positivity. Credit still remains a frustration, along with rates, rents, and utility prices.
There has been a lot of talk of political motivation behind this budget; that it’s nothing more than a set-up for the electorate come voting time in 2016.
However, maybe we just deserve something to go our way for a change. We earned at least the opportunity to smile, if only for a few brief moments.
The past number of years have seen a huge amount of pain taken on by business people and PAYE workers. Businesses closed all around the country and the scars of the recession will stay with many for years to come. Friends and families left and went elsewhere to find a career or just to keep their heads above water.
Now, with this budget, we’ve seen a change in thinking. There is a feeling that, for the first time in a long time, the future is there to make our own.
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