Ibec, the organisation representing Irish businesses, hosted a Budget briefing on business priorities for the Midlands region in Athlone, bringing together local members and TDs.
During the meeting, Ibec’s members highlighted rising operating costs as a serious concern heading into Budget 2024. Ibec is urging the Government to support businesses affected by significant new labour market costs, such as the Living Wage and Pensions Auto-enrollment. Ibec is also advocating for the establishment of a National Infrastructure Fund to ensure that key infrastructure projects are delivered.
“The establishment of a new National Infrastructure Fund is aimed at addressing Ireland’s considerable social, economic, and environmental infrastructure needs committed to be fulfilled in the next decade. Ibec contends that delaying investment in the short term, aimed at preventing overheating, will impede future economic expansion and adversely affect Ireland’s long-term competitiveness. One of the most effective means of stimulating regional economies, such as the Midlands, is by investing in infrastructure, including housing, education, transport, broadband, and making urban centers vibrant and attractive places to work and live.
Furthermore, Budget 2024 must acknowledge the ramifications of rapidly escalating employment costs imposed on employers by Government policies, such as the Living Wage and Pensions Auto-enrollment. Ibec’s sector-wide estimates indicate that these measures would collectively increase the wage bill by 4.7% by 2026 and 9% by 2030 across the entire economy. Certain sectors, characterized by low pension coverage and high living wage levels, may experience considerably higher costs. By 2026 and 2030, these costs could respectively rise to 13% and 17% of the wage bill in the Experience Economy and between 7% and 12% in sectors like retail, wholesale, and administrative activities.
The impact of these policies is magnified when we consider the broader economic context, including the recent changes to the 9% VAT rate and rising energy costs. The accommodation and food sector, upon which the region heavily relies for employment, is still struggling, with activity down 11% in the first half of this year compared to 2019. Adding to these concerns are other impending measures that may directly impose financial burdens on employers. These include the proposed Pay-Related Jobseeker’s Benefit Scheme and additional PRSI costs aimed at funding future state pensions,” Helen Leahy, the Head of Regional Policy, remarked.
