‘RAISING THE PRSI RATE FOR EMPLOYERS WITH NO ADDITIONAL BENEFITS IS NOT ENCOURAGING US TO TAKE A RISK’
Ian Martin
quite well. People are spending money there, just not the way they used to. One restaurant owner I spoke to said consumer sentiment was knocked from people having two takeaways a week to saving that money and going to a restaurant on a Friday. Tey want reasonable quality and value for money.”
ACCESS TO FINANCE
As credit remains a key concern for small firms, Martin welcomes the extension of the 15-day prompt payment to the HSE, local authori- ties and State agencies. However, he says reports on the banking system continue to cause
distress to SFA member companies. “Te ‘wall’ is higher in terms of accessing credit. Requirements are
more onerous than they were a couple of years ago. It’s not that com- panies are different now, but they got away without having to provide the information years ago because the bank manager knew them. Now they have to justify why they need the finance. “For unprofitable or badly run businesses, the chances of getting
money now are slimmer. Finance is available for viable businesses – for example, we decided to buy a new van this year and two banks were willing to finance the purchase.” Te SFA maintains that the outgoing Government had again
ignored the issue of credit for small firms in Budget 2011. “Budget 2011 ignored the fact that many viable small businesses
lack two key ingredients to access financial support from the bank- ing system: collateral because of the property bubble collapse and
associated high negative equity; and a good track record over the past two to three years because of the worldwide economic recession and loss of consumer confidence and spending at home,” Martin says. “Te banks are commercial entities and will not move from risk as- sessment criteria about what is a viable business and therefore we will still require Government intervention to breach this gap, with some form of risk-sharing scheme between Government and the banks.” On top of the access to credit issue, he says Budget 2011 seems
have put further barriers in entrepreneurs’ way by raising the PRSI rate for the self-employed without providing any benefits. “A big thing the SFA is calling for is a levelling of the playing field
as regards PRSI. Raising the rate for employers with no additional benefits is not encouraging us to take a risk. Tis is not good at a time when job creation and retention is the main objective.” Te SFA also has concerns regarding the change in pension provi-
sions. Says Martin: “We [as employers] have been encouraged over the past number of years to make sure employees had some type of pension provision. Te pension tax-relief changes will be a disincen- tive to employees to save for retirement and are at odds with the Government’s objectives contained within the National Pensions Framework. “Changes in pension provision for the self-employed are also very
important. Tere is a major reduction in the allowances you can off- set. We want self-employed people to be treated as others are treated. Otherwise we are just going to replace the banking crisis with a pen- sion crisis in years to come!”
VOL 4 ISSUE 1 2011 OWNER MANAGER 43
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