Wednesday 21 March 2018

Employer lobbyists fear new taxes will lead to jobs haemorrhage

John Mulligan

John Mulligan

Two employer groups -- IBEC and the Small Firms Association -- have said they remain opposed to new taxes in the upcoming Budget and fear any increases will result in more jobs being lost.

The two lobby groups told the Oireachtas committee on jobs, enterprise and innovation yesterday that any fresh tax hikes and putting any additional cost burdens on work could damage business and employment prospects.

"The statutory sick pay proposals are very much at the sharp end of this," IBEC's chief economist Fergal O'Brien told the cross-party committee.

"In companies of all size, if such proposals are to be brought in, it will mean that savings will have to be achieved elsewhere in the labour cost bill.

"That means, are you going to hire more people next year, cut back on overtime, or are you going to have to have redundancies?"


He said that multinationals and other large companies would already have their labour budgets finalised for next year.

"If [the] Government in December puts an additional cost on work, those savings will have to be found by reducing the pay bill," he claimed.

Mr O'Brien also claimed that while PRSI rates are low, there's no cap on the system as employees rise through income brackets.

"It becomes a significant competitive disadvantage, particularly for the higher-end employers," he said.

"Very often it comes up as one of the reasons why Irish companies don't actually win projects."

Mr O'Brien also told the committee that any proposed cuts to child benefit needed to be carefully targeted.

"If you can find some way of targeting that adjustment then you will limit the damage to the domestic economy," he added.

"It does matter how you make the cuts and the savings.

"If you do it across the board, you're more than likely to limit the spend in the rest of the economy."

Ian Martin, the chairman of the Small Firms Association, told the committee that the budget "must prioritise growth".

"No one should be better off on social welfare than in a job," he said.

Irish Independent

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