Businesses need government help to cope with skyrocketing labor and energy costs, says employers’ group Ibec.
In its pre-budget presentation on Monday, Ibec unveiled a €2 billion spending package but says the government may have to spend more if the economy falters due to rising energy costs and interest rate hikes.
“If the economic environment continues to deteriorate over the winter, a significantly more expansionary fiscal stance may be needed to provide robust protection for households and businesses,” Ibec said in his pre-budget submission.
“Government needs to be flexible and responsive to these trends, regardless of budget day stance.”
Some companies are reporting that energy costs are three to five times higher now than they will be in 2021, Ibec said.
Davy Stockbrokers chief economist Conall MacCoille estimates that overall prices in Ireland will soon rise to over 10 per cent due to rising energy costs.
Meanwhile, Ibec estimates that new pension, living wage and sickness benefits for workers will increase labor costs for companies by 9 percent over the next decade.
Ibec chief economist Gerard Brady said companies are experiencing “tighter capital markets and rapidly increasing costs” which could make Ireland’s economy less “competitive”.
“The prospects for the Irish business are marked by growing concerns about rapid changes in our competitive position.
“In the short term, business will focus on dealing with the impact of rapid cost escalation, particularly in energy and labor costs.
He called for “a significant emergency energy support package” from the EU and Irish budgets, incentives for energy efficiency and low-carbon investments.
The news comes after the EU announced an emergency energy summit on September 9 to discuss capping the price of natural gas for power generation.
European Commission President Ursula von der Leyen said on Monday that “skyrocketing electricity prices are now revealing the limits of our current electricity market design for various reasons”.
She said the bloc was working on “emergency intervention and structural reform of the electricity market.”
Ibec is also calling for a “temporary labor market transition rebate” for companies in the “most challenged sectors” of the economy, funded from an existing PRSI levy on employers.
“The government also needs to do a lot more to control and offset the policy-related labor costs that are affecting the business,” Brady said.
https://www.independent.ie/business/irish/ibec-says-businesses-need-taxpayer-aid-to-cover-rising-costs-41944834.html Ibec says companies need taxpayers’ money to cover rising costs