Fianna Fáil is this week bringing forward a Dáil Private Members motion to demand a fair deal for the 350,000 self-employed people in Ireland and a renewed policy focus on the potential of the Small and Medium Enterprise sectors. The motion contains a number of practical measures which will support entrepreneurship in Ireland and bring long term economic benefits to the State.
Fianna Fáil spokesperson on Jobs, Enterprise and Innovation Dara Calleary commented, “Ireland is acknowledged as a world leader in attracting foreign direct investment. No country can match what we have achieved over many decades. 160,000 people are employed by multinationals and the sector rightly commands significant attention in political debate. However by contrast we give far less prominence to the role of the self-employed and domestic business owners in the economy despite the enormous potential for risk takers with new ideas to lead Ireland’s recovery.
“SMEs can range from a small welding business to a local supermarket employing 100 people. Despite our reputation for exports, nearly 90% of Irish owned firms do not currently export. There is huge potential within the domestic economy and Government policy needs to actively nurture this. The jobs crisis cannot be solved by focusing on foreign direct investment alone and by supporting the self-employed and SME sector we are ensuring job opportunities for those with traditional skills as well as people with tech qualifications”.
Finance Spokesperson Michael McGrath stated, “In so far as possible, the tax system should treat people in an equitable manner. Self- employed people lose under the current regime because, while they receive the personal tax credit of €1,650, they cannot claim the PAYE tax credit – also worth €1,650 per annum. This has a particularly stark impact for lower income levels. For example, a self-employed single person on an income of €17,500 pays almost 6 times more tax and PRSI as an employee on the same income.
“There is a strong case for addressing the unfair treatment of self-employed people. This should be done by means of an earned income tax credit as suggested by the Commission on Taxation. The cost of this would be €450m per annum when fully introduced. We are proposing this be phased in over 3 years with an initial tax credit of €500 for the self-employed in 2016. Fianna Fáil also believes that, over the longer term, the 3% surcharge on high income self-employed persons should be phased out so as to equalise the application of the USC to PAYE and self-employed persons.”
Spokesperson on Social Protection Willie O’Dea said, “Unfortunately we all know that some business ideas do not work out, and when this happens we cannot continue to condemn a person to a long drawn out means tested process. If an entrepreneur has made sufficient PRSI contributions they should have an entitlement to jobseekers benefit should their business not succeed. The way the self-employed are treated in the social welfare system is simply not good enough. Ireland stands apart from its European counterparts in the way it treats self-employed in the social welfare system.
“On a phased and voluntary basis we propose to extend a full range of social protection payments including Jobseeker’s Benefit and Illness Benefit to self-employed PRSI contributors as part of our commitment to foster an entrepreneurial culture as well as enhancing social solidarity.”
Spokesperson on Small Business John McGuinness explained, “The domestic SME sector is diverse in nature and employs workers with a much wider range of skills than the multinational sector. It is our view that the jobs crisis cannot be solved by focusing on foreign direct investment alone and by supporting the SME sector we are ensuring job opportunities for those with traditional skills as well as people with tech qualifications.
“Despite our reputation as an exporting nation nearly 90% of all Irish exports come from the multi-national sector. It will take time to turn this around but we have to start with supporting indigenous industry at every opportunity.”
Fianna Fáil’s package of measures to help business owners and the self-employed includes:
- increased PRSI benefits for the self-employed,
- improved access to credit for the SME sector,
- ending the disparity in the tax treatment between the self-employed and PAYE workers,
- an extension of the credit guarantee scheme
- a capital gains tax environment that encourage start-ups
- It is our belief that these will strengthen the domestic economy and the long term economic potential of the economy and Fianna Fáil is committed to their implementation.