Chambers Ireland today (12 July 2018) launched its Pre Budget 2019 Submission, recommending that Government use Budget 2019 as an opportunity to think strategically about how we can future-proof our economy and make the best use of today’s prosperity in preparing for the threats facing Ireland on an international stage.

Speaking at the Chamber Chief Executives’ Forum in Athlone, where Chamber Chief Executives from all over the country have gathered, Chambers Ireland Chief Executive Ian Talbot said,

“Budget 2019 will be the first since the finalisation of Project Ireland 2040, but it will also be the last before the UK’s departure from the European Union. This is representative of the wider position in which we currently stand; with great opportunity for growth on the one hand, and significant external threats on the other.

The message from consulting with our Chamber Network was clear: delivery of the National Development Plan is a priority for business. Government now needs to ensure that the infrastructure commitments made in the National Development Plan are delivered upon. The Rainy Day Fund should act as an equalisation fund to ensure that we can continue to invest in infrastructure in any future economic downturn.

Our Pre Budget Submission recommends a range of measures which aim to make Ireland a better place in which to do business and bolster our economy for sustainable growth well into the future. Supporting entrepreneurs through the Brexit period, enabling indigenous businesses to grow and continuing to improve upon Ireland’s overall competitiveness should be the focus of Government in Budget 2019. Chambers Ireland’s submission recommends measures which will promote a sustainable future through investment in infrastructure; supporting our workforce through fair taxation and affordable childcare; encouraging entrepreneurship though tax equity for the self-employed and improving upon employee share options for SMEs; and battling Brexit through trade supports and maintaining the 9% VAT rate for the tourism industry.

Ireland’s competitiveness is increasingly under threat from the high cost of doing business and general high cost of living in Ireland. Government must focus on addressing the issues contributing to these high costs, from childcare to housing and beyond.

It is imperative that we use Budget 2019 to plan for the future with equal measures of optimism and caution. We stand in a strong economic position today. Strategic planning and spending should lead us on a sustainable path, ready to seize future opportunities and weather any threats.”

Executive Summary of Recommendations in Chambers Ireland’s Pre Budget 2019 Submission:
Planning for a Sustainable Future

Project Ireland 2040
The commitments made in the National Development Plan and the targets set for growth and planning in the National Planning Framework must be delivered upon. Government must commit to a review of our planning and procurement processes.

Rainy Day Fund
Establish the Rainy Day Fund and transfer an initial €500 million to the Fund. Gradually increase State contributions and transfer revenue raised from over profile corporate tax receipts into the Rainy Day Fund. Restrict use of the Rainy Day Fund for delivery of investment in infrastructure and the delivery of the NDP, should growth dip below 2% GNI*.

Corporate Tax
Maintain and defend Ireland’s 12.5% Corporate Tax Rate. Work with international partners and the process of OECD BEPSs on international tax proposals. Exercise caution in over-reliance on corporate tax receipts and transfer revenue raised from over profile corporate tax receipts into the Rainy Day Fund.

Housing
Implement the recommendations of the Kenny Report on CPOs. Evaluate the effectiveness of the Vacant Site Levy and amend the Urban Regeneration and Housing Act 2015 as required to effectively disincentivise land hoarding. The Living City Initiative should be rolled out to all strategic growth cities named in Project Ireland 2040 subject to a review of and improvements to the existing scheme. A Construction Standards Regulator should be established to operate alongside the new Planning RegulatorDeliver a “Cost Rental” model of housing. Double the Local Property Tax on properties vacant for 2 years or more.

Decarbonisation
Invest in the phasing out of inefficient heating systems in homes and premises through the retrofitting scheme. Residential and commercial new builds must be built with integrated renewable low carbon technologies. Increase the utilisation of the existing gas network for renewable biogas. Explore Carbon Capture and Storage options for Ireland. Invest more in energy efficiency auditing for businesses. Support businesses to engage in the circular economy and waste prevention at source.

Transport
The transport projects announced under Project Ireland 2040 must be delivered upon. Invest in rapid transport corridors and rail routes for Ireland’s growth driver cities. Expedite the introduction of a commercial charging regime for Electric Vehicle charging points and introduce initiatives and incentives to support the uptake of EVs. Support CNG infrastructure and invest in CNG buses for inter-city or long-distance public transport services. For intra-city public transport increase use of hybrid & electric vehicles in fleets. Produce a motor policy and taxation roadmap.

Water
Water infrastructure in the National Development Plan must be delivered upon.

Broadband
Deliver the National Broadband Plan.

Education and Skills
Continue to increase apprenticeship and traineeship offerings in a wider range of fields. Make the National Training Fund more responsive to the needs of employers. Introduce a voucher model for funding skills courses for SMEs. Support the re-skilling and up-skilling for those in employment and increase life-long learning levels in Ireland. Increase targeted, responsive training in sectors with skills shortages. Increase investment in entrepreneurship and innovation education for students.

Philanthropy
Endorse a philanthropic culture and develop a dedicated policy framework to support and assign responsibility for companies and individuals engaged in philanthropy. Introduce incentives for philanthropic giving and explore tax and legal frameworks to encourage businesses to donate philanthropically. Invest in programmes to engage young people in civic and social activity primary and post-primary levels.

Supporting Our Workforce

Income Tax
Make incremental increases to the entry point to the higher rate of tax on a multi-annual basis.

Childcare & Narrowing the Gender Pay Gap
Maintain investment in Early Childhood Education. Deliver prompt roll out of the Affordable Childcare Scheme. Deliver a value-for-money cost analysis of childcare provision. Maximise the use of schools and existing community facilities for childcare provision.

Pensions
Introduce an auto-enrolment pension model with a realistic. Retain existing tax relief on pensions contributions.

Diversity
Consolidate all current supports for disabled persons entering the workforce into one overall grant. Funding for specialised equipment or supports should be received by the prospective employee with a disability rather than linked to the place of work. Maintain funding for the Employer Disability Information service.

Encouraging Entrepreneurship

Tax Equity & Supporting Microbusinesses
In this Budget cycle, bring Earned Income Tax Credit for the self-employed in line with the Employee Tax Credit. Introduce full equity in taxation between the self-employed and PAYE workers. Introduce a short-term tax credit on employer PRSI to enable small businesses to grow.

Supporting Women in Business
Expand funds that offer targeted support for female entrepreneurs. Introduce additional supports in management training for female-led companies. Support state agencies to provide training to female entrepreneurs on international trade and increase female participation in overseas trade missions.

Capital Gains Tax
Reduce the Capital Gains Tax rate of 33%. Increase the lifetime limit of €1 million in qualifying capital gains under Entrepreneur’s Relief to €10 million.

Capital Gains Tax Rollover Relief
Introduce CGT rollover for investment in small businesses, where an entrepreneur can apply for relief on the capital gain when reinvesting in an SME or new business.

Key Employee Engagement Scheme
Revise the limits on the total market value of share options. Remove the salary cap and replace with a maximum amount of share options per employee. Ensure Fin Tech companies are eligible for the KEEP scheme. Facilitate the disposal of shares beyond the stock exchange by KEEP companies.

Battling Brexit

Trade Supports
Work with and support the Chamber Network to communicate resources that will help businesses to prepare for Brexit. Support the Chamber Network in providing training to exporters on the issuance of trade documentation and customs training. Make funding available through the Brexit Loan Scheme to support more businesses who may wish to innovate in response to Brexit. Introduce additional supports for businesses in e-commerce. Support collaborations between the Irish Chamber Network and Chambers in the UK on B2B engagement to prepare for Brexit.

Tourism
Maintain the 9% VAT rate for the hospitality sector. Increase the budget of state agencies to invest in market diversification. Enable Fáilte Ireland to provide additional programme supports for tourism businesses to face the challenges Brexit presents. Resource State agencies to increase levels of investment in niche areas that distinguish Ireland as a destination. Increase the fund of €1 million provided for co-operative marketing and promotion of regional ports and airports to €3 million per year. Ensure that tourism initiatives and strategies are coordinated with transport provision. Reconsider and revise operating conditions attached to the development of a third runway at Dublin Airport.