Wednesday 21 March 2018

Maeve Dineen: Cowen must make helping small firms one of his top priorities

LAST week's disappointing figures, which showed that the economy was still stagnating, overshadowed the fact that the value of exports hit an eight-year monthly high in July -- the only silver lining to an otherwise dark-grey cloud.

Of course, the problem with exports is that most of them come from the multinational sector and have hardly impacted on what the CSO quaintly calls the traditional sector, which is where most of us actually live.

What we really need to see now is a rise in exports made by Irish companies, and this won't happen until the Government pays a little bit more attention to Irish-owned exporters, which are going to play a huge role in any economic revival.

Many of our local champions are not large companies, so many of their needs mirror the needs of small and medium-sized companies everywhere. "Less red tape" is a familiar cry, but this does not mean that we should ignore it.

While Ireland has less red tape than many of our competitors, we could still cut down many restrictions.

One obvious example would be employment law, which is a confusing mish-mash of legislation from several decades here and Brussels.

It really is time for the Dail to pass a new act that would codify and simplify the law. An act that was written in plain English and that could be understood by business owners would be added bonus.

Another piece of red tape that is harming our business is the ridiculously low turnover threshold for companies before they must register for VAT.

At present, companies in the Republic must start fooling around with VAT long before their rivals in the North. We need to examine this if we are going to free our companies from paper-pushing and allow them to sell overseas.

The Cabinet is due to discuss plans to merge the 35 county enterprise boards within weeks and there is almost certainly merit in this proposal, but only if this is part of a genuine commitment to helping business rather than saving money.

The enterprise boards are one of those things that should not work in theory but do work in practice. There are literally hundreds of companies who owe their existence to these boards and the cost of jobs created here is far lower than the cost of jobs created by most other agencies.

The problem is not with the boards, but with the sheer number of different organisations that exist to help business.

Here we could probably learn a lot from Denmark, where that country's many organisations for business were closed down and replaced by a single building in each of Denmark's four provinces.

The officials working in those buildings were then benchmarked and paid according to the number of real and lasting jobs they managed to create over the years. We are used to thinking of the Scandinavians as left-leaning idealists, but countries such as Denmark did not become one of the wealthiest exporters in the world through long maternity leave alone.

The country has a practical approach to measuring achievement within the civil service that is so clearly lacking here.

We could learn from their prime minister, who made helping small companies one of his official 10 top priorities. It was mentioned regularly, and again benchmarked, at every level.

While there are many priorities that could justifiably be in Brian Cowen's top 10, small companies and the jobs they create definitely belong on his list. Assuming, of course, that he has such a list.

Irish Independent

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