Lobby groups representing retailers and recruitment agencies have called on the Government to tap the €855 million surplus in the National Training Fund (NTF) to help employers in the upcoming budget.
Retail Ireland, a division of the employers lobby group Ibec, and the Employment & Recruitment Federation (ERF), both say the NTF, which is funded by a 1 per cent tax on private payrolls, should be used to fund various pro-business initiatives.
Both lobby groups also separately raised concerns about the impact on businesses of labour market reforms such as statutory sick pay and extensions of parental leave. Retail Ireland said the various reforms will add 9 per cent on to an average business’s payroll over the next decade, and far more for labour-intensive businesses such as retailers.
Retail Ireland’s submission ahead of the budget, which will be presented by the Government on September 27th, focuses on emergency financial supports for retailers that it says are “struggling to cope” with escalating energy and labour costs.
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The lobby group suggests that companies that can show “challenged viability” due to the State-imposed labour market reforms should be allowed to waive their NTF contributions. It also wants struggling businesses to be granted rebates of up to 2 per cent of annual payroll costs, or two years’ of NTF contributions. The rebates could be in the form of training vouchers, it said.
The ETF, meanwhile, wants the NTF surplus to fund extra skills and training initiatives, and for businesses such as builders that hire more apprentices to be allowed waive their annual contributions. The recruitment lobby group also called for some of the labour market reforms to be deferred for two years, as businesses struggle to cope with the inflation crisis.
Retail Ireland wants its members to be eligible for State aid schemes currently open only to exporters and manufacturers struggling with increased energy costs. It says retailers are “just as exposed” to rampant energy cost inflation. It also calls for an extra €450 million to fund energy efficiency incentive schemes, as well as commercial rates waivers for businesses that revamp urban commercial buildings.
“Having been through the disruption of Brexit and Covid, acute inflationary pressures now risk undermining a sustainable recovery,” said Arnold Dillon, the director of Retail Ireland. “Budget 2023 must include significant direct measures to alleviate labour market and energy cost pressures.”
The ETF’s budget requests also include allowing businesses to write off 50 per cent of training costs against employers PRSI, as well as a reduction in levels of income tax.
“The budget must reduce personal tax burdens to allay concern among inward investors that our marginal tax rates, especially for higher earners, at 52 per cent, are out of line with international standards”, said Donal O’Donoghue, president of the ERF and managing director of the recruitment firm, Sanderson.
