In the face of high inflation and looming challenges, Budget 2024 should focus on supporting Irish SMEs, writes Neil Hughes
As we look ahead to 2024, there remains much to be optimistic about. Despite high inflation, the latest Azets SME Pulse Survey reveals that fewer than one in five SME leaders anticipates a decrease in revenue and profits this year. This points towards the positivity that surrounds the future of SMEs.
It’s not the time to be complacent, however. Challenges lie ahead. Rising prices are putting a squeeze on already tight margins while many businesses are facing difficulties in attracting and retaining talented people.
Employing more than a million people and accounting for two-thirds of firms in the private sector, SMEs are the backbone of the Irish economy, and this group should be a major consideration for Government in Budget 2024.
SME Innovation Fund
We propose the Government set aside €2 billion to establish an SME Innovation Fund, so Irish SMEs can harness the opportunities of the twin digital and green transitions.
Putting aside €2 billion from the recent record tax take, taken in conjunction with other measures, could provide an important step in diversifying Ireland’s economic model and ensure that SMEs are nurtured and can thrive long into the future.
National minimum wage
SMEs across Ireland are concerned with the increasing cost of doing business.
We recommend limiting any increase in the national minimum wage next year to the rate of inflation prevailing on the date of the Budget rather than the 12 percent increase recommended by the Low Pay Commission, which would place a significant burden on SMEs.
SME Talent Taskforce
We urge Government to consider the creation of an SME Talent Taskforce to address the significant challenges facing SMEs in attracting and retaining talented people within the domestic economy.
Featuring representatives of Government, Enterprise Ireland, Local Enterprise Offices, employment bodies and the SME sector, it would be tasked with developing a dedicated roadmap to address bottlenecks in the labour market.
Bringing together a new SME Talent Taskforce would help ensure that SMEs have a level playing field in attracting and retaining talented people and help them to succeed in a tight labour market.
These measures should help SMEs ease the rising cost of doing business and staff shortages, as well as develop sustainable firms.
Neil Hughes is the Managing Director of Azets Ireland
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