Irish Economy
Retail Ireland wants tax cuts to "kick-start growth"; 40,000 new jobs in sector?
By Michael Hennigan, Finfacts founder and editor
May 6, 2014 - 12:09 AM

Printer-friendly page from Finfacts Ireland Business News - Click for the News Main Page - A service of the Finfacts Ireland Business and Finance Portal

Retail Ireland, a unit of Ibec, the principal Irish business lobby group, in advance of a conference in Dublin today, has called for income  tax cuts to "kick-start growth" and it claimed that the sector has the potential of creating 40,000 new jobs in the sector in coming years.

According to the CSO, there were 138,000 employed in 'Wholesale and retail trade; repair of motor vehicles and motorcycles' at end 2013 - - a week hardly passes without some group claiming how thousands of jobs could be magiced up if the Government does x or y for them.

Ignoring this nonsense, what is interesting is the claimed need for tax cuts, which suggests that the 2013 jobs added of 61,000 coupled with expectations of about 50,000 jobs this year, are not expected to have much of an impact on spending.

Of course, demanding tax cuts is seen as a substitute to raising pay levels.

Irish Economy 2014: Did Ireland add 61,000 jobs in 2013?

Retail Ireland today said that 2014 would see the start of a meaningful recovery in the sector. "Despite somewhat disappointing Q1 retail figures, there are signs that many consumers are returning to the shops after a long hiatus." The group predicted that this will lead to consumer spending growth of nearly 2% this year.

The conference, which will be opened by Enda Kenny, taoiseach, who will hear that the sector has the potential to create 40,000 new jobs over the coming years, if the conditions are right.

The lobby group says that recent retail sales figures have shown that while the volume of sales (excluding cars and bars) has increased by 2.2% in the past year, the values of sales has stayed the same. This clearly indicates that shops are aggressive discounting in an effort to attract customers. The pressure on the sector remains. To address the key challenges that still face the sector, Retail Ireland called on government to: 

  • "Cut income tax: The tax burden is too high and tax on work is way out of line internationally. The entry point to the higher marginal tax rate should be increased, and the marginal rate reduced below 50%. This will put more money into the pockets of Irish consumers, and ultimately benefit the Exchequer though greater economic activity and tax revenue.
  • Ensure regulation is sensible, proportionate: Any new regulation of the sector and the supply chain should not impose extra costs on retailers. The government should do nothing that would increase business costs. At the height of the boom many costs, including wages, spiralled out of control, we cannot allow this to happen again,
  • Support the move online: Provide support and incentives for Irish retailers to trade online and ensure they benefit fully from the growing digital economy. At present 75% of online spend goes to companies without a physical presence here. We need to address this trend."

© Copyright 2011 by Finfacts.com