2026-02-19

3. Deputy Rose Conway-Walsh asked the Minister for Enterprise, Tourism and Employment to provide an update on the comprehensive review assessing the cost structures for SME and family-owned businesses, which can be found in the programme for Government; and if he will make a statement on the matter. [13850/26]

The cost of doing business in this State for small and medium-sized enterprises, SMEs; family-owned businesses; and the self-employed is running out of control. In the programme for Government, it is listed that the Government will conduct a comprehensive review to assess the cost structures for SMEs and family-owned businesses to identify areas where costs can be reduced. Will the Minister provide an update on this review? Will he tell businesses the areas he has identified where costs will be cut?

I thank Deputy Conway-Walsh for her important question. The Government recently established the Cost of Business Advisory Forum and published the action plan on competitiveness and productivity, both of which are commitments in Programme for Government: Securing Ireland’s Future. The establishment of the Cost of Business Advisory Forum delivers on the commitment regarding supports for small businesses, enterprise and industries. The forum is a tripartite collaboration bringing together various representative bodies spanning multiple sectors as well as SMEs. The purpose is to jointly consider those issues that can lead to higher costs for businesses in Ireland, any associated regulatory or infrastructural issues that merit a changed approach, and steps that could be taken to mitigate these issues. The first meeting of the advisory forum took place in June. Numerous organisations representing Ireland’s enterprise sector, including SMEs, were joined by officials from a variety of State agencies and Government Departments. The second meeting, which was the forum’s first thematic meeting, took place in July and focused on energy costs and security of supply. Other thematic meetings included a meeting on insurance costs in August, a meeting on regulation and planning in September, November’s meeting focused on water services, the meeting in January of this year focused on legal costs, and a meeting on tax reporting and compliance took place yesterday. The forum has met regularly over the past eight months, with each meeting devoted to a distinct thematic area of concern for businesses. There are two outstanding meetings. The last thematic meeting will be on banking, payments and financial services and will take place on 25 March. The last meeting of the forum will focus on members' feedback in relation to the final report to the Government and is scheduled for the first half of 2026. The focus of the action plan on competitiveness and productivity is on the key actions that can be taken to strengthen Ireland’s competitiveness and productivity which in turn will lead to improvements in our economic performance. The action plan was published on 10 September 2025 and contains 85 actions across six themes, including the third theme, which focuses on creating and scaling more SMEs.

Go raibh maith agat, Minister, for that update. The important thing is that it makes a difference on the ground and makes a difference to businesses because the situation facing SMEs with regard to costs is increasingly more unsustainable. We saw 848 insolvencies last year. I fear for what the number will be in 2026. At the end of 2025, 80% of businesses from across all sectors that participated in the SME business sentiment survey by Chartered Accountants Ireland and GRID Finance reported an increase in their costs, with a special mention for energy costs. It was reported yesterday that Irish business confidence has fallen to just 54%. This is the lowest level since the Covid-19 pandemic, and it is down sharply from 81% at the beginning of the year. In contrast, 74% of SMEs globally remain optimistic about the year ahead with only a slight year-on-year decline, so there is something we need to focus on here.

I focus on evidence. I refer, for example, to the measures that were taken in budget 2026, such as the reduction in the VAT rate for the hospitality sector. We are giving the sector 4.5% on its margin to assist with its costs and we are saying that we need 7% growth right across the tourism sector under our strategy, A New Era for Irish Tourism. We have also reduced energy costs with the 9% VAT rate on gas and electricity. We have increased the loan limit available from Microfinance Ireland to €50,000 for low-cost loans into the sector and will be coming forward with a working capital programme to succeed the growth and stability loan of €500 million, which was utilised late last year. We also increased the innovation voucher to €10,000. Critically, we reduced a host of conditions for sustainability grants like the energy-efficiency scheme, which gives €10,000, or 75% of the cost, to small businesses like local shops and butchers. Such small businesses on the high street are so important to the fabric of rural life. We will keep doing that and keep working to ensure we do our best to reduce those key costs for businesses.

The question that must be asked is this: what is happening here at home? When we look globally, the Minister has named all of the initiatives he is doing but why are Irish business leaders growing even more pessimistic about the future? Confidence in projected revenue growth dropped dramatically at the end of last year, from 79% to 59% in just three months. When businesses were asked about increasing head count in 2026, the figure dropped from 59% to 46%. These figures are not abstract statistics; they signal the slowing of growth, reduced hiring and growing uncertainty across local economies. We need to look at this and we need more actions. SMEs and family-owned businesses are the backbone of our economy. They sustain communities, provide employment in rural and urban Ireland and drive innovation and local enterprise. The programme for Government recognised the need for a comprehensive review of SME cost structures. Businesses are now urgently waiting for that to make a real difference in their businesses and in keeping their doors open.

I am very acutely aware of the cost of doing business. That is why we have brought forward a forum, it is why we are going to take action in this regard and it is why we have taken a suite of measures across budget 2026. We know what is happening in the Irish economy; 2.82 million people are employed in our country. That is a record. We know that the average wage is €1,000 per week. That is a record; it is up 45% since 2015. We know that all 13 sectors of the economy that are measured in the CSO data are growing. That is a record right now in this country. Our tax revenue coming in to resolve the infrastructural deficits we have is at a record level. I would point out that the Deputy has opposed every attempt I have made to stabilise small businesses, from subminimum rates to the living wage to sick days - every area that drives costs for business. If you ask a small family business what its biggest driver and challenge is, you will be told that it is wages. The biggest challenge for every business is wages. We are assisting with that and we are helping real wage growth in the economy, where we know our most vulnerable employees are outpacing the rate of inflation with their pay packets.