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Budget Fails To Address Impact Of Rising Business Costs On Retailers

By Maev Martin
Budget Fails To Address Impact Of Rising Business Costs On Retailers

Following the publication of Budget 2024, industry representative bodies, including RGDATA, the Convenience Stores and Newsagents Association (CSNA), and the Small Firms Association (SFA), have expressed their disappointment with the government response to industry concerns. Maev Martin reports.

"RGDATA is extremely disappointed that Budget 2024 has not addressed the very serious concerns that independent retailers raised with Government about the huge cost increases they are piling on local businesses, with increases to the National Minimum Wage, a new public holiday, increases in sick pay, pension auto-enrolment, enhanced reporting to Revenue, the new Deposit Return Scheme and the proposed Latte Levy, to name a few,” said RGDATA director general, Tara Buckley.

“We believe that the proposed €250 million rates rebate scheme is wholly inadequate and will not compensate shop owners to pay the additional €4,000 plus per employee per annum that all of these new Government costs will impose on them.”

Buckley said that independent retailers are also “extremely disappointed” about comments made by the Taoiseach and other Ministers “dismissing the very real concerns raised by small business owners highlighting their fears about the cumulative impact of all of these measures on their businesses and the jobs they provide.”

RGDATA has written to the Taoiseach and asked him to meet face to face with RGDATA members “to hear from the coal face about the devastating impact that such a significant increase in employment and business costs will have.”


RGDATA is also seeking meetings with other senior Ministers.

“We are concerned that they are seriously out of touch with the daily challenges that SME employers currently face dealing with a rapidly increasing high cost operating environment where the largest element of these costs are due to actions taken by the Government,” she said.

“We have asked the Taoiseach to explain just precisely where he and his Government colleagues expect employers to find and fund this extra €4,000 per employee per annum.

"These are low margin businesses operating in extremely challenging local markets, with no hidden reserves and no capacity to just magic up additional turnover from local customers.

"They are already under constant pressures (including from Government) to reduce retail prices.”


Tara Buckley said that RGDATA is currently surveying its members on their response to the Budget and to the proposed rates rebate scheme and will share the results shortly.

“We are also urging local shop owners to make their anger and disappointment clear to their local TDs,” she said.

Bad Budget For Employers

The Convenience Stores and Newsagents Association (CSNA) also stated that Budget 2024 wasn't a good one for retail employers.

The CSNA has expressed its disappointment, to both the Department of Finance and to the Department of Enterprise, Trade and Employment, that assurances given by Taoiseach Leo Varadkar, and other government ministers, that small and medium-sized businesses would receive meaningful assistance have not been delivered.


‘Assistances that were supposed to cushion the increased costs we will encounter from the enormous and unprecedented hike to the minimum wage, ongoing additional labour costs (public holiday, extra sick leave etc) and other government-induced costs such as the Deposit Return Scheme and the proposed latte levy are contained in a €250 million rates relief package to be divided amongst 130,000 rate payers averaging, €1,900 each,’ the group noted.

‘This is a tiny fraction of our projected cost increases and is clearly not sufficient.

'Make no mistake, these cost increases are 100% due to Government decisions.’

The CSNA added that ‘it is very difficult for us to believe that no one in any of the relevant departments is unaware of the real additional costs that these decisions will incur. The praise heaped upon our sector during the pandemic emergency sounds very empty and hollow now.’

“The extraordinary rise in labour costs following the decision of this Government to accept the recommendation of the LPC to apply a 12.4% increase in the National Minimum Wage is a huge concern to all our members,” said Vincent Jennings, chief executive officer of the CSNA.


“We are very aware that most of our members do not pay NMW rates, but are very conscious of the effect that such a large (€1.40 per hour) award will have on the wage expectations of most of our staff who will feel justified to seek a maintenance of the current differential.

“The State are 100% responsible for these increases yet their ‘response’ is nothing short of pathetic.

"Using rates bills as a measuring device of businesses’ cost of business ‘pain’ is unacceptable; if real reliefs are to be offered, they need to reduce the effect of Government decisions such as increased sick leave, extra public holidays, auto enrolment and, of course, the incessant ‘drive’ towards a Living Wage in 2026.

"The CSNA is most disappointed that this ‘response’ from the State is misdirected and, worryingly, appears to have no knowledge of the very real consequences that these decisions are having on thousands of small family businesses throughout Ireland.”

Not Ambitious Enough

Meanwhile, the Small Firms Association (SFA) has also criticised Budget 2024 for not being ambitious enough at addressing the impacts of rising business costs.

“In a budget that recognised the changing economic outlook, the Government has missed an opportunity to respond to the rising cost of doing business that entrepreneurs and small business owners are facing, driven mostly by government-imposed costs,” said SFA director, David Broderick.

“While the measures to support investment and growth in enterprises through an SME package is welcome, until we know the details, business owners will continue to struggle with rising labour costs, insurance rates and dealing with the twin transition of digital and climate.

“Employment costs for business owners will continue to rise next year with the confirmation that the minimum wage will increase to €12.70 from January 2024, as part of the transition to a living wage by 2026. In our pre-budget submission SFA called for the introduction of transition supports for small firms who will struggle with the introduction of the living wage.

"We will continue to seek this permanent transition package.”

The SFA welcomed the increased EII relief from €250,000 to €500,000, extended entrepreneur relief to angel investors, and the modified R&D Tax Credit, which it said would benefit eligible entrepreneurs and growing small businesses.

“However, it is regrettable that the SFA’s call to make investing in a business in Ireland more attractive through a reduction in Capital Gains Tax has again been ignored,” said Broderick.

The SFA also welcomed the increase in the entry point to the top rate of tax, changes to the USC rate, and the jump in the earned income tax credit to €1,875, which it said would benefit the self-employed.

“Reducing taxes on jobs is essential to help indigenous enterprises attract and retain staff and maintain competitiveness,” said Broderick.

“Small firms are the backbone of the Irish economy, employing under half the private sector.

"Budget 2024 doesn’t recognise the cost pressures business owners will be under next year. SFA, on behalf of members, will now seek clarity and a timeframe on the announced SME package, to safeguard its intended effectiveness and to ensure inclusivity of all small businesses.”

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