Here in Clare, SMEs (small to medium enterprises) are our biggest employers – shops, cafes, hotels and small businesses – they drive our local economy. We need to create a thriving indigenous sector and reduce our dependence on foreign multinationals. Forget focusing only on the bottom line; we need to develop a sustainable, circular economy with small business at its forefront.
Fairness for the self-employed
There are over a quarter of a million SMEs in Ireland who employ 1,000,000 people between them. The majority are micro-SMEs with fewer than 10 staff. This makes small, local businesses our biggest national employer. These SMEs: small companies, businesses and sole-traders, they’re the backbone of our economy but they don’t get the support they deserve. For example, if an employee is called for jury duty their employer has to keep paying them, even while paying the wage for another person to fill in. In a small business with four or five staff, this is the difference between breaking even at the end of the month or finishing in the red.
Being self-employed is challenging because the paycheck isn’t steady, illness or sudden family events mean lost earnings and you never have the chance to switch off. On top of that, it is not a level playing field. Restricted access to social benefits and a heavier tax burden means the current system is unfairly skewed against the self-employed. If we want to encourage a sustainable, local economy model then our smallest businesses, who are our biggest employers, need a change.
A key step in the right direction is balancing the tax burden. As part of the Green Party - I plan to match the Earned Income Tax Credit and the PAYE Tax Credit to ensure equal treatment between employees and the self-employed.
Finding staff is another key challenge facing smaller businesses who cannot offer the benefits of large multinationals. Yet there’s a cohort of people effectively trapped by rigid social benefits regulations that penalise them for taking short-term or part-time work. A more gradual and integrated system of social benefits and return to work protocols would help both employers and the unemployed.
It’s no secret that the cost of insurance has been skyrocketing. This is hitting SMEs even harder than most. If you’re self-employed and you’re already paying your health insurance, home insurance and car insurance. Add work vehicle insurance and business insurance, where premiums have trebled over the last 5 years, and you’re getting hit from every side. It’s not sustainable – and that’s why we’re seeing excellent, viable companies that have been in business for years having to close up shop. The Green Party intend to put a cap on increases by insurance companies which are purely profit driven.
Raising finance to upgrade and futureproof their business is another challenge facing SMEs. Our innovative solution is the creation of a network of Local Public Banks. At the moment, Irish SMEs pay more than twice the average European interest rates for loans. They also pay disproportionately more for these loans than bigger multinationals do. This discrepancy is more than three times the European average!
We need a new pillar in our banking system which can deliver small scale commercial lending to SMEs across the country. A Local Public Bank, with a mandate to serve the community in its region, could fulfil this role. These banks are common across Europe and fill the gap between Credit Unions and Commercial Banks. They’re not profit-orientated – they aim to support our SMEs where they need, allowing our companies to excel in the areas they’re in.
VAT for Cafes, Restaurants and Hotels
The return of the 13.5% VAT has hit the tourism sector across Clare hard. Cafes, restaurants and hotels operate on tight margins in a competitive field. The 4.5% increase in VAT last year took an extra 5 cents out of every Euro sold. That is on top of the one Euro in ten already given toward VAT.
The hidden costs are piling up for SMEs – from costly health and safety measures to hyper-restrictive building regulations to VAT increases and insurance expenses. Yet, we need to think about our future and what type of future will be. Do we want large chain stores and multinationals the only businesses left standing? The ones whose financial clout allows them to swing regulations in their favour? Or do we want sustainable businesses with a human touch, ones that support our local towns and villages? Let’s create a kinder, more supportive economy. Vote Green!