Business wants a Budget that will rein in taxes, spending and inflation, limit or abandon the €2 billion benchmarking pay deal, and promote investment in start-up companies and research and development (R&D).
Benchmarking will cost €900 million this year and the country's leading economists are unanimous that it will damage competitiveness.
The Irish Small and Medium-sized Enterprise group's (ISME) pre-budget submission calls for its abandonment, as it will bring us closer to the "bad old days" of high taxes and borrowing.
ISME, the Irish Business and Employers Confederation (IBEC) and the Small Firms Association (SFA) are against increasing PAYE and PRSI. IBEC is also opposed to increasing excise duty on alcohol and energy and wants a commitment that VAT will be cut to 17.5 per cent over five years.
IBEC and ISME want to see the tax system used to stimulate investment in new businesses and in R&D. ISME has a comprehensive list of demands in this area. These include a 100 per cent capital allowance for all plant and equipment for start-ups and double reliefs for R&D.
IBEC is asking for a 20 per cent credit on all R&D expenditure that qualifies for tax relief.
IBEC affiliate, the Irish Software Association (ISA) wants the Business Expansion Scheme and Seed Capital Scheme extended to 2006. It also wants the personal limit for tax relief for investors in these schemes to be increased to €65,000 from €31,750 and the company relief limit to go to €2 million from €750,000.
On the macro-economic side, IBEC and the SFA want the Government to cut inflation to 2 per cent. On fiscal policy, IBEC says the Government should aim to create a surplus of 3 per cent of gross national product, which it says is necessary to fund infrastructure.
