Small Firms Association reacts to insolvency reports
The Small Firms Association (SFA), the representative body of businesses with fewer than 50 people, have reacted to recent reports showing an increase in business insolvencies. The PWC Insolvency Barometer shows a 41% increase in insolvencies, with SMEs accounting for 85% of all business failures. Furthermore, Deloitte Ireland’s Insolvency & Restructuring Statistics show that the corporate insolvencies increased by 47% in the first quarter of 2024 compared to the same period last year.
According to the PWC report many restaurants have closed over recent months with hospitality having three times the equivalent business failure rate per 10,000 businesses compared to retail.
Director of the SFA, David Broderick said:
"The PWC barometer indicates that the hospitality sector is experiencing severe pressure, serving as a canary in the coalmine for the challenges confronting many small businesses. With 80 percent of SMEs opting for liquidation rather than examinership, there's evident weariness amid escalating business costs, suggesting they've reached a breaking point.
The SFA advocates for more direct action to alleviate costs for struggling businesses. This includes proposing a PRSI rebate, structured to provide a rebate for each worker earning below an agreed-upon threshold. Additionally, we suggest implementing more rigorous stress tests on all government legislation through more rigorous Regulatory Impact Assessments, evaluating how proposed laws will affect the functioning and prosperity of SMEs. Furthermore, to better equip businesses for future skills demands, we propose the introduction of a National Training Voucher Scheme. This scheme aims to enhance in-company training and broaden participation in upskilling and reskilling efforts to encompass all businesses and employers."
