The Budget received a mixed reaction from business lobby groups this evening, as the Government's "lost opportunity" offset the gains perceived in the fiscal plan.
Although measures announced by Minister for Finance Brian Lenihan were broadly welcomed, the Government was criticised for cutting almost €1 billion from its capital investment programme and failing to provide incentives to help small and medium sized businesses grow.
Business lobby group Ibec described it as "a turning point" that put Ireland on a sustainable path.
"The right thing to do is the hard thing to do, and the right thing has been done," said Ibec's Danny McCoy.
"Confidence can now be restored, both to consumers and to international investors. In getting the country back to work, it is crucial that the public finances are stabilised without major increases in taxation."
However, the Irish Small & Medium Enterprises Association said the Budget represented a "lost opportunity" that failed to recognise the plight of small businesses and introduce stimulus measures to help them remain competitive and keep jobs.
The organisation also expressed its concern at the reduction in the level of funding for training those in employment, and said the announcement of a carbon tax at this time was wrong.
"We are concerned that this may be an additional tax and may not be revenue neutral as was the initial intention," Isme said.
The group welcomes several measures included in the Budget, such as the car scrappage scheme, the reduction in excise duty and cuts in public expenditure. Isme called on the Government to implement the public sector pay cuts, and not be influenced by protests from the unions.
The Small Firms Association (SFA) also felt the Budget failed to provide enough stimulus for the small firms' sector. Head of the SFA Aidan O'Boye welcomed the steps taken to address the fiscal situation, but said: "The Minister has missed an opportunity to put jobs and enterprise centre stage and provide a comprehensive package of support measures that will return the economy to growth by supporting enterprise in job retention and creation."
The SFA also welcomed the Government's commitment to retaining the 12.5 per cent rate of corporation tax, and tax exemptions for start-ups. The group also supported the introduction of the water charges and property tax.
"Indigenous small business has been and will continue to be the corner stone of our economic success and creating a supportive environment for the enterprise sector, must become the priority for government policy in the New Year," Mr O'Boyle said.
The Construction Industry Federation (CIF) said the €1 billion reduction in capital was "regrettable", but welcomed the continued availability of full mortgage interest.
"The capital budget for the period 2010 to 2013 has now been reduced by over €15 billion as a result of measures over the last four budgets. In real terms, this means the cancellation of a large number of school building, social housing, water services and transportation projects," said CIF director General Tom Parlon.
"The CIF has repeatedly made the point that investment in construction offers the most immediate and most effective means of stimulating economic activity and protecting jobs and that this has been the tried and trusted approach adopted internationally. We regret the fact that the Government here has chosen instead to reduce its infrastructure spending."
The Chartered Accountants of Ireland praised the Minister's decision not to increase the overall tax burden on the economy, and the reduction in VAT. The group predicted that the reduction in VAT and excise duty could help tackle the issue of cross border shopping and stimulate the hospitality sector. The cuts in social welfare and public sector pay would help tackle the spiralling national debt, the group said.
The sentiments were echoed by the Institute of Certified Public Accountants in Ireland (CPA)
"Rationalisation of public sector pay and social welfare payments is something this government did not shy away from and we accept the unfortunate necessity of these cuts if we are to reposition Ireland as a competitive, well-resourced and ethically sound place to do business."
Financial Services Ireland (FSI) said the decision to position Ireland as European hub for the funds industry could create up to 5,000 jobs over the next five years.
"Combined with firm reassurances on the corporate tax rate, and no further increases in personal taxation, the Budget sends a clear and unambiguous message to IFSC firms that the Irish Government is committed to developing and growing this important part of the economy," said FSI director Brendan Kelly.
