Minimum wage making Ireland uncompetitive – accountants

A new survey of Irish accountants conducted in the past week has shown that almost 60pc believe the minimum wage is making Irish business uncompetitive.

The survey, carried out by the Institute of Certified Public Accountants in Ireland (CPA), questioned more than 500 accountants employed in accountancy practices and across a wide range of industries throughout the country, with almost 85pc of those questioned working in SMEs.

According to the CPA survey, almost 20pc of those surveyed said the introduction of the minimum wage had had a significant, or very significant impact, on their business.

However, one in every two respondents said their organisation would not employ more people even if the minimum wage was reduced, although 20pc of respondents said their organisation would employ more people if it was reduced, with this rising to 36pc and 29pc in the hospitality and retail sectors respectively.

In terms of increasing Ireland’s economic competitiveness, two key reforms which emerged from the survey included reducing the cost of utilities and services and relieving the administrative burden on small businesses.

According to CPA president Geoff Meagher (pictured), urgent action is required to ensure a competitive operating environment for business: “Improving Ireland’s export performance and raising productivity across all areas of the economy are the only sustainable strategies for securing long term prosperity and creating jobs.

“Ireland is a small open economy with a relatively small population but our size can be our strength as it bestows on us agility and adaptability.  In order to adapt and innovate, concerted action is required on costs, infrastructure improvements and continued measures to encourage innovation, research and development.”

Calling for a strong emphasis on skills development, Meagher said funding has to be set aside to increase the capabilities of SMEs and address skills deficits in potential growth areas. “Retraining options have to be focused and aligned with the needs of industry,” he added.

The CPA also pointed to what it said was a Government failing to act on the recommendations of high level review groups on the reduction of red tape for the country’s SMEs.

“Over 90pc of businesses in Ireland are either micro, small or medium enterprises. These companies are critical to our economic recovery and deserve to be supported.  It is important to recognise that even small changes to ease the administrative burden can make a meaningful difference to the viability of a business,” Meagher said

“The main goal in the immediate future must be to foster an atmosphere in which SME’s can flourish while at the same time ensuring proportionate regulation which will protect Ireland’s reputation as a safe environment in which to conduct business.”

Despite recent reports that the recession in Ireland is over and the economy is slowly returning to growth, the CPA survey of accountants also revealed that more than half of respondents disagreed, or strongly disagreed, with the statement that Ireland is emerging from recession.

Pictured: CPA president Geoff Meagher