Opportunity for stimulus 'lost' but fiscal order backed

BUSINESS REACTION:THE BUDGET received a mixed reaction from business lobby groups, 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 and Medium Enterprises Association (Isme) said the Budget represented a “lost opportunity”; it failed to recognise the plight of small businesses and to 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.

The Small Firms’ Association felt the Budget failed to provide enough stimulus. Chairman Aidan O’Boyle 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 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 . . . approach adopted internationally. We regret the fact that the Government here has chosen instead to reduce its infrastructure spending.”