Government measures for SMEs announced
A welcome reprise or a missed opportunity
The Minister for Employment, Trade and Enterprise, Peter Burke has brought forward measures to support small to medium sized businesses (SMEs) and these measures were announced in a press release early last week. These include introductions and extensions of various grants and schemes which they hope will assist businesses who are struggling. The industry has experienced substantial blows on its road to recovery from post covid closures and many in the industry have felt that the Government has not responded to these challenges effectively. Budget 2024 did little to alleviate the concerns of many of SMEs in the industry, at a time when costs of running such businesses had significantly increased.
SMEs – the backbone of the local economy
Small to medium sized enterprises are the life blood of this industry, and it is fundamental that they receive the maximum support available. The restaurants, coffee shops, food trucks and local bars employ approximately 200,000 workers and their contribution to the local economy and community is elemental to the industry.
Closures and a call for action
In February of this year the Restaurant Association Ireland (RAI), announced that 600 businesses in the previous 6 months had to ‘shut up shop’, unable to remain viable. The industry has urged the Government to take meaningful action to prevent further closures and offer support to businesses who are struggling to stay open, provide good quality service and value for money.
Key measures summarised.
The Increased Cost of Business (ICOB) Scheme will remain open for another 14 days and businesses will receive a second payment of this scheme. The Innovation Grant Scheme will be doubled and the maximum amount available under the Energy Efficiency Grant Scheme will be increased to €10,000. The Business Contribution rate will decrease from 50% to 25%. More business will have the opportunity to avail of the Trading Online Voucher, as sectors with up to 50 employees will be eligible, this also applies to the Digital for Business Consultancy Scheme. SMEs will be able to apply for larger loans as the lending limit for Microfinance Ireland loans will increase from €25,000 from €50,000. There will also be new initiatives rolled out including ‘Ireland’s Best Entrepreneur Programme’ to encourage entrepreneurship and a new online ‘National Enterprise Hub’ will be launched for SMEs to access information concerning business supports available. Measures around sick leave pay was also addressed and there are plans to review ERSI research before decisions can be reached. From October 2024, employer PRSI threshold will be increased from €441 to €496.
Responses – ‘a mixed bag’
There are mixed responses from representatives in the industry. These measures are welcomed and do provide much needed financial support in the form of grants and payments. However, there are still underlying issues which have not been addressed. Pat Crotty of Vinters Federation Ireland (VFI) argues that grants are not the answer’ and that reduction of VAT and alcohol excise rate would be more beneficial.
Michael Magner, president of the Irish Hotel Federation states that: “This is a missed opportunity to provide meaningful assistance to our sector at a time of ever-increasing business costs, much of which are a result of the Government’s own policy interventions”.
It remains to be seen how effective these measures will be for SMEs within the industry. It may be a step in the right direction and potentially could alleviate some of the financial pressure. Moving forward, the government need to tackle the major issues which will have a long-term impact on businesses in the industry and it is hoped that Budget 2025 will offer more substantial measures.
