Fianna Fáil Spokesperson on Business, Enterprise and Innovation, Robert Troy, has welcomed the no-deal Brexit enterprise funding secured in Budget 2020 but said there has been insufficient progress to enhance financial incentives for SME’s and to improve competitiveness.
Deputy Troy explained, “My party engaged in a series of pre-budget discussions to ensure that enterprise funding was put in place for a no-deal Brexit scenario. While a €110m fund will be made available, Minister Humphreys must immediately clarify the exact mix of grant aid, equity or loans contained in it for impacted businesses.
“Business groups have regularly criticised the extremely restrictive conditionality and limits in existing schemes, for example the rescue and restructuring scheme – this must be avoided in any new support schemes.
“It speaks for itself that only 14% of the €300m announced last year by the Minister has been drawn down by only 194 companies. This clearly demonstrates the complexity in applying for the schemes and also hits home the reality that businesses are reluctant to take on more debt.
“The Minister must also outline whether all no-deal schemes will be within the existing state aid regime. My party has consistently called for a revision to state aid rules at EU level in order to increase the permissible grant aid to safeguard vulnerable businesses from a hard Brexit. The Budget was the optimal place for this to be clarified but 23 days out from Brexit and there is still no clarity.
“I welcome the moderate changes to the R&D credit for SMEs and to the Employment and Investment Incentive (EII) scheme as well as the increase in the earned income tax credit. However, Fine Gael have once more failed to meet their commitment under their Programme for Government for full equalisation for the self-employed with the PAYE credit by 2018.
“Nevertheless, there needs to be radical policy change in supporting our indigenous entrepreneurs. Full equalisation is a core Fianna Fail policy, which we will continue to drive forward, along with providing full social protection supports to the self-employed.
“Disappointingly, competitor nations will still have an advantage when it comes to incentivising SME start-ups and scaling up. The Government have failed to make any changes to Entrepreneurs CGT, which puts Ireland at a competitive disadvantage.
“The UK will still have a far more attractive CGT relief for entrepreneurial gains of up to £10m, far in excess of the €1m Irish limit. Despite the changes in this budget, the UK’s EII scheme will also be vastly superior.
“Business organisations have said that the Irish limit on both of these schemes needs to be changed to stop the flow of start-up companies moving to the UK, where a more benign entrepreneurship environment exists. Finally, there was an absence of real measures to tackle the cost of doing businesses”, he concluded.