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Budget 2013: The Grind Continues

Dec 06, 2012

In Budget 2013 the Government faced two major challenges in reducing the deficit and dealing with the unacceptable level of unemployment. Reflecting on today’s announcements, it is clear that the proposed budgetary adjustments have been made; however, a sustainable recovery will be more difficult to achieve given the lack of ambition in the measures announced.

Speaking this afternoon (05/12/12), Ian Talbot, Chambers Ireland Chief Executive said, “The route to sustainable recovery is job creation. Getting people back to work not only increases revenues through taxation, it also reduces the pressure on public services. This budget has not gone far enough in creating the right environment to achieve this.”

“While the 10 point tax reform plan and credit specific initiatives for small business are welcome, they could be more ambitious. For instance, we welcome the raising of the turnover ceiling before companies become liable for VAT on invoices rather than on payment received; however, the Chamber Network called for an increase in the ceiling to €2.5 million and we are disappointed that it has only been increased to €1.25 million.”

“The retention of the 9pc VAT rate for the hospitality sector will also help to secure employment and grow job opportunities in these areas. Additionally, we are pleased that the Government took note of calls not to transfer the cost of sick pay to employers. We also view the new 10 year €175 million venture capital fund for new and expanding Irish companies over the medium term, along with the expansion of the R&D tax credit as welcome announcements.”

“There is no doubt that budgetary adjustments are necessary in order to get the country’s finances back on a sustainable footing; however, we maintain that this must be achieved primarily through cost containments.”

“In this context, we welcome the renewed impetus relating to identifying and implementing savings in the public sector. The public sector sick leave bill alone cost tax payers in excess of €500 million in 2011 and is exactly the sort of saving the Government should be targeting. The Croke Park Agreement did not go far enough in delivering essential savings. This new energy must produce quantitative results.”

“In the context of property taxes, these must be applied, gathered and distributed fairly, with a view to putting local authority budgets on a sustainable basis for the future. We look forward to charges on business declining in the future now that business will no longer be the ‘funder of last resort’ for Local Government,” he concluded.

-Ends-

For further information contact Amy Woods, Chambers Ireland on 01 400 4319, 086 6081605 or email amy.woods@chambers.ie.

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