Controlled inflation, investment in infrastructure, childcare support and tax cuts of various kinds loomed large on businesses' Budget wish list this year, writes Barry O'Halloran
While there are differences in detail between what the various elements of the business community want, there were no major surprises in the raft of documents they produced over the past couple of weeks.
The only departure from the past three years or so is that the Minister for Finance will be Mr Cowen, and not Mr McCreevy, and the fact that he will be delivering his first budget in comparatively benign circumstances.
The sums may differ, but the consensus is that he will have a surplus of €1 billion-plus to play with. The fate of that money is one of the things that has been occupying the groups that represent business since the autumn.
The pre-Budget submission season generally kicks off close to Hallowe'en. However, this year, the State's biggest employers' and business group, IBEC, decided to get its spake in even before Mr Cowen became Minister for Finance in early October.
IBEC wants the Government to give back around €700 million of the projected surplus to taxpayers by increasing the threshold at which we begin paying at 42 per cent of our earnings by €5,000.
This would cut everybody's tax bill while also meaning that a number of people will only be taxed at the standard 20 per cent rate. IBEC also wants tax credits for childcare.
The group's opposite number, the Irish Congress of Trade Unions (ICTU), differs in many areas, but is basically singing off the same hymn-sheet as IBEC when it comes to personal taxation.
Like IBEC, ICTU influences budgetary policy through the national pay deals, and its affiliated unions represent workers in the public service, finance and the media, as well as key sectors like construction and retailing.
The group wants a €20 a week minimum relief for childcare rising to €50 a week for couples using approved services. It also wants workers on the minimum wage - €7 an hour or €273 a week - taken out of the tax net completely.
At the same time it wants all workers on the average industrial wage of €29,879 to be taken off the 42 per cent rate, and 80 per cent of workers to be shifted to the standard 20 per cent rate.
Where IBEC and ICTU differ most in the area of corporate tax. The trade unionists want the Government to consider increasing this from 12.5 per cent, which is the lowest rate in Europe. Conversely, the employers want the Government to restate its commitment to keeping it.
ICTU acknowledges that, for the moment at least, the Government is unlikely to consider increasing corporation tax, particularly as every minister from the Taoiseach down regularly singles it out as a key draw to foreign investment. The Small Firms' Association (SFA), which is an IBEC affiliate, wants the €300 million that has been sitting unused in the local authority fund to be returned to businesses. The group says that local government agencies have failed to use this money, which is raised from businesses through rates.
The group also wants a 150 per cent tax allowance for small firms that are investing in research and development (R&D). In tandem, it wants the number of researchers working in the country to be doubled by 2010.
Like all other organisations, the SFA believes that there is considerable scope to hand back money to workers in the form of tax breaks.
At the same time, it warns that Government needs to rein in spending and keep inflation under control. The organisation, which represents small and medium-sized business, argues instead for getting value for taxpayers' money.
This is a concern of IBEC's also. The group's director general, Mr Turlough O'Sullivan, points out that between 2000 and 2003, day-to-day spending increased by €11 billion with no corresponding boost in public services. The group wants public service reform, and is maintaining a long-held belief that the State needs 10,000 fewer workers.
The Irish Small and Medium-sized Enterprise (ISME) association wants around 6,000 public service jobs to go. In addition, it warns that benchmarking, the special pay deal mechanism for the public service, should be ditched in favour of performance-related pay. It also advocates prudence and controlled spending.
One area where everybody wants to see the Government splashing out is infrastructure, particularly roads and public transport (the ICTU includes health and education under this heading).
IBEC also believes that waste management should be a priority, and wants to see the State build four incinerators around the country to deal with the ever-mounting amount of rubbish the country produces.
Not surprisingly, the Construction Industry Federation (CIF), which represents many of the companies that build infrastructure, wants to see the Government spend €6.6 billion on this next year. It points out that spending money on these services will fall well short of the target that Mr McCreevy set last year.
This is 5 per cent of gross national product (GNP), which estimates say will be €130 billion next year. If that is the case, says CIF director-general, Mr Liam Kelleher, then the Government will have to increase its infrastructure spending by 18 per cent to €6.6 billion in 2005 in order to make its target.
