Government 'will exclude small firms' in contracts
NEW Government rules on the tendering and awarding of public contracts will exclude small businesses, the Small Firms Association (SFA) warned.
The organisation's chairman said the Government's new policies for deciding which bidders should win public contracts have the potential to eliminate small businesses from the tendering process. The rules, which seek to save taxpayers €500m, emphasise cost-saving and electronic transactions.
"In its pursuit of the cheapest price, the Government is neglecting the fact that this will not deliver either the quality, cost-in-use savings or service levels it desires – but will result in lost jobs," said SFA chairman AJ Noonan.
He was speaking at the organisation's annual lunch in the former Burlington Hotel in Dublin, now trading as a Hilton DoubleTree Hotel. The SFA also called for better access to credit for small firms in addition to a fairer public procurement system.
"Access to credit is still one of the biggest issues for small firms," said Mr Noonan. One in four small firms still finds it hard to access credit, according to research from his organisation.
"Both AIB and Bank of Ireland claim they have a huge approval rate for loan applications from businesses, but there is shockingly low draw-down levels.
"This is because the price and terms and conditions attached to these loans are just not feasible. There's no point approving a loan if what you are offering is not actually going to be any use to the consumer." He called on the Government to establish a new state-owned bank aimed solely at lenders, modelled on the now-defunct Agricultural Credit Corporation.
The SFA also called on the Government to clarify what Ireland's exit from its bailout programme on December 15 will mean for small businesses here.
"Will regained sovereignty mean parity for entrepreneurs and small businesses in accessing finance and credit?" said Mr Noonan.
"Will it mean that our pension contributions will be safe from further levies?"
Transport Minister Leo Varadkar spoke at length at the event, calling among other things for a hike in the point at which Irish people are charged a higher tax rate.
Currently, the higher tax rate of 41pc kicks in on any income above €32,800 for a single person and €45,400 for a married couple or civil partners.
"Irish people are hit with the highest rate of tax even on modest incomes," said Mr Varadkar, who added that these taxes were damaging domestic spending, which is crucial for small firms.