IBEC, the group that represents Irish business, today said the €3.5 billion adjustment in Budget 2013 was a painful but necessary further step towards getting the economy back onto a sustainable footing. It said Government deserves credit for its efforts to limit the impact on jobs and growth. IBEC said taking a significant amount of money out of the economy will have a negative impact on economic activity, but the decision not to significantly increase employment costs was sensible. The group welcomed specific new measures designed to tackle unemployment, increase lending to SMEs and allow for early access to AVC pension contributions.
IBEC Director General Danny McCoy said: "Broadening the tax base and focusing on cutting expenditure means that the direct impact on jobs has been minimised. However, abolishing the employer redundancy rebate will make it more difficult for companies to make the changes needed to stay afloat and restructure. The decision not to introduce a statutory sick pay scheme is welcome, as it would have pushed struggling firms out of business and cost jobs.
IBEC welcomed the specific measures designed to tackle unemployment, the new SME tax reform plan and investment fund, and more streamlined supports to help businesses take on new staff. The move to allow early access to AVC pension contributions, which IBEC proposed, will put more money into the economy and help support domestic demand.
"The last year has seen Irish economic fortunes improve and 85% of the planned fiscal adjust has now taken place. If we can get growth back into the economy, future budgets will be a lot easier," concluded Mr McCoy.
See also attached briefing note, which provides more detailed analysis.
- Budget 2013 IBEC briefing note.pdf - 1,403 Kbytes