'Budget should support domestic enterprise'

OPINION

By Robert Troy, TD, Longford Westmeath

According to the government’s White Paper on Enterprise published last year, SMEs and entrepreneurship are central to a national objective of diversified, sustainable growth.

Ireland has long directed programmes at indigenous firms in the manufacturing and internationally traded services sectors, with a specific emphasis on expanding exports.

The justification for this is obvious: exporting firms have been demonstrated to be bigger, to have greater productivity, to be more skill and capital intensive, and to providing better salaries than firms that are confined to the domestic market.

With this in mind, and as this budget will be the first one since the publication of the White Paper, there is a compelling reason to take positive action to support and incentivise domestic businesses in this year’s budget so that they play a bigger role in the economy and ensure that we are not over-dependent on the multinational sector for jobs, investment and tax revenues.

I believe that we have an opportunity to address a trend where the revenues from Foreign Direct Investment (FDI) provide us with the largest part of our annual tax take (€20bn in 2022). It is vital that we balance this with indigenous enterprises that can scale sufficiently and indeed become the FDIs of other markets, in due course.

As recently as last week the Central Bank again highlighted the notable drop in export growth for goods and services from 13.9pc to just 0.2pc in 2023 and the forecast of growth for 2024 is 2.9pc.