Irish SME groups call for Government support amid rising costs
The Irish SME Association (Isme) has called on the Government to provide greater levels of support for SME businesses in Ireland amid the ever-worsening energy cost crisis.
According to the industry body, some businesses are facing cost increases of 100% or more in their monthly bills, and it warned that increases like this can only result in cost increases for their customers.
It noted that while the Government announced a reduction in the VAT rate on gas and electricity from 13.5% to 9% until 31 October, large increases in energy prices are expected after this time.
Isme chief executive Neil McDonnell said that the inevitable price inflation from energy cost increases can only be moderated if there is Government intervention to mitigate the impacts on small business.
“We will need a scheme of direct supports for small business, similar to the Covid-19 Restrictions Support Scheme during the pandemic.
“The cost of Government inaction will be far higher in terms of business closure, and we also need to see an explicit Government strategy to avert another energy crisis in the winter of 2023.”
Meanwhile, the Small Firms Association (SFA) has warned that viable businesses in Ireland may close due to their inability to absorb rapidly rising business costs.
As businesses and households struggle with rising inflation, particularly for energy, the organisation said small businesses are now caught between rising inputs and customers who are demanding value.
According to its recently published Cost of Doing Business Report, the average small business faces costs of €138,814 per month. The monthly cost for micro-businesses with less than 10 employees is €66,426 and for companies with less than 50 workers, it's €193,535.
“Ireland’s micro and small enterprises are facing cost challenges in every area of business be it labour, transport, insurance, banking, and utility costs,” said SFA director Sven Spollen-Behrens.
“Many operate in low-margin environments, making it difficult for them to absorb cost increases and demand for value makes it impossible for many to pass the increase onto customers.
“At a time of high inflation and no end in rising input prices, notably energy prices, the SFA is concerned that this may lead to viable enterprises closing due to their inability to absorb rising business costs. To avoid this and safeguard our domestically owned businesses, Budget 2023 must provide certainty on costs and maintaining competitiveness.”
