A new national business organisation, Irish Employers for Affordable Rates (IEAR ), which wants the Government to reform the present local authority commercial rates system, was launched recently.
John Conran, the former Wexford hurling manager and All-Star recipient, who runs a furniture design business in Rathnure, Wexford, and is chairman of the new body, said that commercial rates could be described as the silent killer of small business in Ireland. Rates levied on Irish businesses by local authorities had increased by 47 per cent over the past 10 years and now amounted to an annual charge on business of €1.35 billion, which was not sustainable.
He said: “Employers want fair play and will pay their fair share but we object to an inequitable system that has made the level of commercial rates genuinely unaffordable to many businesses throughout the country – many of whom are already struggling to survive.”
IEAR has three objectives. It wants an amendment to the Valuation Act 2001 to allow an employer to appeal a rates valuation due to a change in economic circumstances.
The Government needs to take immediate action to reduce the overall cost of Local Government, and financing of a reduced cost system of Local Government should be much more broadly based than at present.
IEAR will ask the Government to establish a review group representative of experts and all affected interests to examine the present rates structure, examine alternatives, including international practice and report back within six months with recommendations for a fairer system.
Mr Conran said: “We believe that the Government will be receptive to our call for action. Our objectives will help protect jobs and create new ones, help small firms survive and grow and get the economy moving. A fairer rates system will provide an immediate economic stimulus because reduced rates will provide money for job support and investment in the business.”
An independent report, Assessment of the Local Authority Commercial Rates Issue for the SME Sector, by economist Jim Power and commissioned by IEAR, was presented at the launch. The report states that local authority commercial rates now represented the biggest burden facing most small businesses, and was increasingly forcing many small businesses out of existence altogether. As businesses closed, a large part of the commercial rates base was eradicated.
The objectives of IEAR have the formal support of ISME, RGDATA, the Irish Hotels Federation, the Licensed Vintners Association, the Vintners Federation Ireland, the Society of the Irish Motor Industry, The Restaurants Association of Ireland, as well as a number of chambers of commerce and other business organisations.