Retail Excellence Ireland (REI) has cautiously welcomed new supports announced by the government today, but warned that the measures do not go far enough.
The largest representative body for the retail industry in Ireland noted that the government’s new measures do not mitigate soaring sick-pay costs and minimum-wage increases, which have impacted small and medium enterprises (SMEs) significantly.
Under the package, SMEs will be entitled to grants of up to €5,000 in a new round of the Increased Cost of Business Scheme.
The maximum amount of the SME Energy Efficiency Grant will increase to €10,000, and businesses with staff members earning the minimum wage will pay a lower rate of employers’ PRSI, at 8.8%.
‘Will Not Make A Meaningful Impact’
Speaking about the supports, the chief executive of REI, Jean McCabe, said, “This new support package from the government would be welcome, particularly for those businesses that are eligible for the Increased Cost of Business Scheme.
“However, taken as whole, this support package will be little comfort for many retailers and will not make a meaningful impact on their bottom line.
“Even though the government may be constrained in what it can introduce before the next Budget, this package doesn’t nearly match the cost increases that have been imposed on businesses this year.”
McCabe noted that supports were dwarfed by the increased sick-pay costs faced by retailers.
She said, “In some cases, retailers are seeing an eightfold increase in sick-pay costs, compared to this time last year.
“This is unsustainable, especially for smaller operations.”
The PRSI amendment, McCabe added, is weighted in favour of larger businesses, which may not be able to avail of the Increased Cost of Business Scheme.
“This change translates to a saving of €11.50 per week, per employee,” she said.
“In reality, while this may be insignificant for SMEs, this will provide some relief to larger operations with a sizeable full-time employee base on minimum wage, but falls short of taking into account those employees that now sit just above minimum wage, having recently been forced into the higher PRSI bracket due to relativity.”
McCabe added that the increased Energy Efficiency Grant was good in theory, but, in fact, few businesses had the capital to take on a project of that nature, pay up front, and receive the grant at a later date.
She said that this was a barrier that the government needed to consider, moving forward.
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