I asked the Minister “to address the impact PRSI rates and commercial rates are having on small and medium size businesses and their ability to employ when they are struggling to profit financially”
Rates are crippling small business and thus there is a reluctance to facilitate more employment which is why rates need to be more reflective of size and profitability off the business.
I also asked “his views that a number of small businesses have had to let persons go owing to the fact that administration costs and taxation are effecting their ability to operate and it would be beneficial to all party’s to have an inter Departmental approach to boosting employment and prospects for growing businesses”
I recently spoke of the need for a living wage and not this focus on a minimum wage which keeps people below the income threshold of €11.45 per hour for a decent standard of living. There is a reluctance from small businesses to facilitate this as PRSI rates and commercial rates are so high for them. The Ministers reply ‘the growth outlook for the economy is positive for the coming years, which will provide opportunities for all sectors of the economy and small businesses in particular spread throughout the country to share in the recovery’, firstly I question the extent of the recovery for the vulnerable, as I stated in my Leaders Question, growth is measured mostly by GDP and monetary figures (which is basically a survey of the trading economy), the welfare of the people is not taken into account. I suggested the health of the economy/nation should be measured in terms of the standard of living for all citizens.
Small start up and locally run business need assistance from the state before the can increase employment and wages, the same way large multi nationals who are here in most part for our corporation rates and are given the royalty treatment by Government.
To ask the Minister for Jobs, Enterprise and Innovation if he will converse with both the Minister for Finance and Minister for Environment, Community and Local Government to address the impact PRSI rates and commercial rates are having on small and medium size businesses and their ability to employ when they are struggling to profit financially; his views that a number of small businesses have had to let persons go owing to the fact that administration costs and taxation are effecting their ability to operate and it would be beneficial to all party’s to have an inter Departmental approach to boosting employment and prospects for growing businesses..
- Maureen O’Sullivan.
R E P L Y
Minister for Jobs, Enterprise and Innovation (Mr Bruton TD)
A key objective of the Action Plan for Jobs process which this Government commenced in 2012 was to rebuild our competitiveness and provide a solid foundation for future growth. The recovery in jobs and exports to date is in large part due to the considerable improvement in competitiveness that has taken place in recent years.
Our improved competitiveness is reflected in our international rankings also. Since 2011, Ireland’s rankings in both the IMD and WEF competitiveness reports has improved – from 24th to 16th in the IMD’s World Competitiveness Yearbook and in the World Bank’s Doing Business 2015 report, Ireland is ranked 13th out of 189.
As noted in the Government’s Spring Economic Statement, the growth outlook for the economy is positive for the coming years, which will provide opportunities for all sectors of the economy and small businesses in particular spread throughout the country to share in the recovery. This is a key objective of the Regional Action Plans for Jobs that my Department is currently developing and local authorities in every region are involved in seeking to identify how to improve the operating environment for business in their regions.
However, as we were reminded by the recent publication of the National Competitiveness Council’s Cost of Doing Business report, we need to sustain the progress made over the last four years in improving our cost base. This extends to all areas of the economy, including areas such as personal taxation and commercial rates.
In order to ensure we have a cross-government and inter-departmental approach to the issues of costs for business and that we can sustain and grow employment, the Council’s report was considered by the Cabinet Committee on Economic Recovery and Jobs and by Government. Departments have been asked to consider potential actions to improve competitiveness that might be undertaken through the Cabinet Committee structures.
The Minister for Finance is reviewing on an ongoing basis the taxation issues for business and in this context launched a public consultation on Tax and Entrepreneurship on 2nd June last and I look forward to the outcome of that consultation process.
In relation to commercial rates, local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent Commissioner of Valuation under the Valuation Act 2001. The levying and collection of rates are matters for each individual local authority.
The annual rate on valuation (ARV), which is applied to the valuation for each property determined by the Valuation Office to obtain the amount payable in rates, is decided by the elected members of each local authority in the annual budget and its determination is a reserved function.
The Minister for the Environment, Community and Local Government is aware of the continued need to restrain the costs on businesses. His Department has in recent years requested local authorities to exercise restraint in setting, and where possible to reduce, ARVs and they have responded positively in this regard. The national average ARV decreased each year from 2010 to 2014; 2015 is not directly comparable due to the local authority mergers and the necessity to harmonise rates across new local authority areas.
The Minister for the Environment, Community and Local Government will continue to keep the approach to rates by local authorities under active review, and is determined that every avenue will be pursued to optimise efficiency and contain costs in the local government sector.