Reduce public spending, say Ireland’s owner managers

As the countdown to Budget 2010 on 9 December begins in earnest later today with the release of the Pre-Budget Outlook by the Department of Finance, exactly half of privately owned and family businesses in Ireland have indicated in a KPMG survey that cutting government expenditure is the single most important move the Government could make to support private indigenous business.

KPMG’s 2009 Smart Moves survey has also shown that more than four in 10 (42pc) owners and managers of Irish-owned businesses believe export growth will be the key driver of economic recovery.

Other drivers to recovery identified include improved credit as a result of the establishment of NAMA (24pc) and private consumption growth (21pc).

Meanwhile, less than one in five (17pc) of companies believe a wider range of employment and/or export supports should be introduced in the budget as the main priority.

Mixed attitudes to NAMA
Attitudes to NAMA from owner managers appear to be mixed. Only 39pc of those surveyed believe NAMA will help improve credit to non-construction related business, with 26pc stating that it won’t help such businesses access credit and a significantly high percentage (35pc) of respondents expressing uncertainty either way.

However, interestingly, only 13pc of those surveyed gave priority to ensuring that minimum lending criteria should part of the NAMA legislation.

When it comes to confidence in the Government, the owner managers surveyed appeared to give Brian Cowen the benefit of the doubt. Over half (57pc) said they believed the Government is taking the right measures to address economic difficulties, with 43pc expressing a lack of confidence on the matter.

Judging from the KPMG survey, Irish-owned firms are optimistic about their survival prospects for the coming year, with 98pc of those surveyed expressing confidence that their business would survive the recession.

Real concerns over public spending
“The survey shows that privately and family-owned business have real concerns about the impact of unsustainable public expenditure and its inevitable knock-on effect on business in the form of higher taxes and other costs,” said KPMG Tax Partner Mike Gaffney at the firm’s conference yesterday.

“At a time of often heated debate about the economy, let’s not forget that over one million people are employed in businesses with less than 100 employees and the need to focus on the costs and other issues borne by this sector is obvious,” he added.

The corner-shop mentality
Also speaking at the conference was entrepreneur, dotcom millionaire and Dragons' Den judge Sarah Newman who highlighted back-to-basics attitude being adopted by Irish businesses: “Businesses are taking a ruthless view on overheads, employees reaching targets and standards, purchasing and so on. In essence, it’s a return to the corner-shop mentality and I believe this works.”

Newman also highlighted to need for indigenous innovation to drive the Irish economy out of recession: “Out of necessity comes invention, a dire environment miraculously seems to cultivate new initiatives - and, if these new initiatives are supported, I believe we can kick-start recovery.”

Pictured: Mike Gaffney, Partner, KPMG, and entrepreneur and Dragons' Den judge Sarah Newman testing the voting system before KPMG’s interactive Smart Moves survey