PROGRAMME FOR SMALL BUSINESS:FINE GAEL has said that an average small business could save up to €50,000 per year under measures set out in a new rescue plan for the sector which the party published yesterday.
Under the 18-point programme, Fine Gael proposes to reduce VAT rates and to abolish the €10 travel tax introduced by the Government last year.
The party also said it would reduce the higher rate of VAT from 21.5 to 20 per cent and cut the lower rate from 13.5 per cent to 10 per cent at a cost of €538 million. It said it would finance the measures by reductions in current public spending.
Fine Gael said the abolition of the travel tax, which it claimed would do damage to the struggling tourism, leisure and hotels sectors, would cost €88 million.
The party also said that it would reduce local authority rates, freeze government charges and cut red tape.
It also said that it would end “upward only” rent reviews to ensure that businesses could benefit from market rates and extend the existing Government commitment to pay its bills within 15 days to cover all agencies, local authorities and State companies.
The party also said that it would reduce energy costs by having the Commission for Energy Regulation set a ceiling for prices rather than fixing prices. It said that it would also mandate the Financial Regulator to examine the “breakage fee” that borrowers have to pay to switch from a fixed interest rate to a variable rate.
Fine Gael has also said that it would review all existing employment regulation orders which set down in law minimum pay and conditions for workers in a number of sectors. It said that all of the existing employment regulation orders were drawn up before the current recession began, at a time when inflation was running at 5 per cent and when there was no talk of pay cuts or pension levies.
Fine Gael enterprise spokesman Leo Varadkar said that these orders provided for compulsory wage increases over the next year which employers had to pay.
“We all accept across the economy that there is a pay freeze under way and that some people have accepted pay cuts. We do think that the employment regulation orders which require increases in pay in certain sectors should now be renegotiated and a new system in future where they should be negotiated fairly and equally between employers and employees.”
Speaking at the launch of the policy document, Fine Gael leader Enda Kenny ruled out a reduction in the minimum wage.
Mr Kenny said that the party’s proposals for the small and medium business sector would sustain 80,000 jobs.
“Recent budgets made a bad situation worse for both workers and employers. Too many new taxes only served to reduce business activity and increase costs.
“The increase in VAT rates that drove millions of euro of business north of the Border is a classic example of that type of poor decision making by this Government,” he said.
Asked if the exchequer could afford the package of VAT and tax cuts proposed by Fine Gael, Mr Varadkar said that it could if was prepared to balance it with reductions in spending
Speaking on the forthcoming local and European elections, Mr Kenny said that Fine Gael wanted to be the largest party in local government . He said that it saw 300 seats as “a magical barrier” and that securing anything over 310 - 320 would represent “an enormous gain”.
Mr Varadkar, the Fine Gael director of elections in the Dublin European Parliament constituency, said that he was worried about slippage in support for its candidate Gay Mitchell because all the attention had so far been about whether Fianna Fáil or Sinn Féin would win the last of the three seats.
Mr Kenny said he would be “disappointed” if Fine Gael did not retain its two seats in the East constituency.