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IRELAND’S COMPETITIVENESS WATCHDOG has warned that further action is needed to make sure businesses aren’t priced out of operating in Ireland.
In a new report, the National Competitiveness Council (NCC) found that while Ireland’s cost base “has improved…over the last four or five years”, the country remains a high cost location for business, and warns that costs could again be on the rise.
The evidence collected in this report suggests that the Irish economy has rached a turning point in terms of cost competitiveness…relative cost competitiveness in Ireland is now disimproving.
The report flags labour costs, property costs and rent increases, as well as prices for business services as particularly likely to get more expensive in the short term.
Particular attention is given to the high cost of credit for smaller businesses, with interest rates for non-financial corporations 31 per cent higher than the euro area on loans up to €1 million, and 27 per cent higher on loans above €1 million.
IBEC points finger at slow pace of reform
The NCC attributes price falls to the recent economic turmoil, rather than a more fundamental readjustment which would mean businesses could look forward to a less expensive future.
Ibec’s director of business representation Mary Rose Burke echoed this, saying that cheaper prices during the recession had not been acheived by reforms, and therefore weren’t likely to stick around for long if the economy improves.
We’ve seen no structural changes that will fundamentally change the cost of living and the cost of doing business.
The NCC report concludes: “Looking to the future, futher structural or policy induced changes are necessary to ensure that prices do not escalate and erode competitiveness as the Irish economy returns to stronger rates of growth.”
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High taxes, rent, wages all cost the irish economy dearly. Everything is more expensive in Ireland because of this. Lower taxes, people can purchase more. More tourists will visit, = more jobs created less people singing on. Win Win. Shame the government don’t see this.
Because we bailed out the banks, developers, bondholders, speculators and other cowboys and made private debt public and created a monster called NAMA most of our taxes go to paying off the debt. So, councils raise rates, the cost of living rises and everything gets more expensive more so with high VAT.
What other country made private debt public and bankrupted itself for generations to come. The government has no money due to the bank fiasco and NAMA so don’t expect any help.
Pity corporation tax is only at an effective rate of 2.2% and not 12.5%! The 2.2% only brings in 5 billion Euro from the multi-nationals. That is criminal given Ireland;s economic situation.
Like it or not, having a business in Ireland makes you a an unofficial tax collector . VAT, DUTY , INCOME, USC, RATES, PRSI, CAPITAL GAINS………pass the bear nuts please.
Lower Taxes?. ha our government would do the exact opposite, properly try to raise vat to 25%. its the corporation tax that needs changing, the likes of apple,google,facebook and other big companies are paying penny’s in tax. while any normal wage paying person is being fleeced with taxes on wages! It’s astonishing the Irish government has raided pensions of ordinary Irishmen and women in order to stay vaguely solvent, but it is extremely reluctant to touch the revenues and profits of BIG companies.
It’s so hard for businesses to get a foothold here cos of the expense of doing business. Too expensive and not enough of the credit companies need means we export a lot of our good ideas. We created that nama monster to go forth and sue local county councils to get the money in, in a lot of cases. The accountants running the country miss out on the fact, it’s all from the same pot and we must pay for that also. nama is one of the most expensive crowdfunding exercises of all time, redistributing the wealth back to the wealthy classes.
Our rates in 2013 – €950
Our rates in 2014 – €2400
Same business, different year………
It is not only too expensive to do business in Ireland, but there is little encouragement for many business holders to want to remain in business with the way that this country is being taxed off the face of the planet. Go into any rural town and you will see plenty of shops with owners just hanging on in business by their fingernails while their neighbours have closed altogether…….It’s a sorry sight.
Not if you’re a massive American multinational that pays little or no tax.
Shhhhh!!! Be quiet. We want them to pay no tax so they’ll stay here and create jobs and not to leave here for the Caiman Islands or China.
As I’ve said here before;
•cost to employ people
•cost of electricity, water
•commercial rates
•red tape
•fuel costs
•rental cost
•Sky, IMRO, PPI (hospitality sector)
•company tax
•income tax for low earning SME’s
•supplier costs (cheaper in EU)
All too high for small businesses.
Thats right Don, businesses such as retailers have to compare the operation costs over the return from sales, whereas if the top line ia greater than the bottom line then the buainess is in trouble
As an accountant friend used to say, “there is no point in being a busy fool”.
Exactly!
Try turning over €1.1 million with a profit of €150k!
Only if you think commodities are 300% dearer than the rest of the world, then……..yes!
Can agree with many of their points but not babe blame on labour costs. Many of these businesses make enough profit to share fairly with those on the ground who actually do the work to earn it.
Yes
Everything is cheaper until you get to a government service then the price is through the roof
Is the NCC another quango? I never heard of them before.
This is one reason that I would like to see any spending money the government gets spent on infrastructure rather than tax cuts or public sector pay rises.
Targeted spending can improve competitiveness.Spending it on putting money in people’s pockets will cause inflation.
Chris, we need inflation to survive.
We need inflation to reduce the costs of our debt. However, that is going to be a result of ECB decisions. What we don’t want is inflation in Ireland and no inflation outside Ireland and we shouldn’t pursue policies that cause that to happen.
That’s a good argument against cutting taxes Chris, good thinking!
Let’s have 30 years of Japanese style deflation instead… Isn’t that what you mean?
Inflation too quickly leads to deflation. We don’t control our currency.
Loaf of bread in 2004, say €1
Loaf of bread in 2007, say €3
Loaf of bread in 2015, say €6. Is it a fair assumption that bread in 2030 will be €13?
Deflation has to happen. Prices cannot keep climbing. The @rse has to fall out of it somewhere!
So taxation is the solution? Let’s just impose a lower standard of living on the majority while they pay for a higher standard of living for the privileged? We had a war of independence to rid ourselves of that form of governance.
It’s too expensive, to do anything in Ireland. Cost of Governance, too many taxes and too many politicians. Start at the top, cut the heck out of numbers and pay. Then pass on the savings to citizens, won’t happen though!
You should try Spain, to open a business could take up to 3 months like if you want to open a bar you need up to 50/60 licences from the fire resistance of the floor to the soundproofing of the local and you need to pay for all of them, if you want to be self employed then its even worse, you have to pay minimum of 270e per month for the privilege whether your earning or not then your VAT and income taxes not to mention most costs cannot be declared on your tax returns
Spain are in the same boat as us that’s why. Zero growth and austerity budgets.
Yes. It is. I’m glad somebody noticed.
Did the Irish politicians set the Spanish rates or are they copying them
Maybe ms kerins could become an advisor to companies struggling to compete. Her exemplary track record of bucking the laws of economics in running a business surely warrants a government consultancy role of some sort.
No.
Pingwave Lighting reduced the electric bill by 85% for the 17 blocks of apartments it retrofitted in February last! now that what we need to tell every apartment owner in the country who are getting fleeced with property charges!
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