Rose Conway-Walsh on SME crisis: 'Costs running out of control'

The cost of doing business in this state for small and medium enterprises and family-owned businesses and self-employed are running out of control. In your programme for government it is listed there that you will conduct a comprehensive review assessing the cost structures from SME and family-owned businesses to identify areas where costs can be reduced. Could you this morning provide an update on this review and tell businesses the areas that you have identified where costs will be cut? The Government recently has established the Cost of Business Advisory Forum and published the Action Plan on Competitiveness and Productivity, which are both commitments in the Programme for Government 2025 Securing Ireland's Future. The establishment of the Cost of Business Advisory Forum delivers on the commitment regarding supports for small businesses, enterprises and industries. The Forum is a tripartite collaboration bringing together various representative bodies spanning multiple sectors as well as SMEs. The purpose is to jointly consider those issues that can lead to higher costs for businesses in Ireland, any associated regulatory or infrastructural issues that merit a changed approach and those steps that could be taken to mitigate these issues. The first meeting of the Forum took place in June, where numerous organisations representing Ireland's enterprise sector, including SMEs, were joined by officials from a variety of state agencies and government departments. The second meeting, which was the Forum's first thematic meeting, took place in July and focused on energy costs and security of supply. Other meetings on thematic areas included insurance costs meeting in August, regulation and planning in September, November's meeting focused on water services, meeting in January of this year focused on legal costs and tax reporting and compliance meeting which took place yesterday. The Forum has met regularly over the last eight months, with each meeting devoted to a distinct thematic area of concern for businesses. There are two outstanding meetings. The last thematic meeting will be on banking payments and financial services, which will take place on 25 March. The very last meeting of the Forum will focus on members' feedback in relation to the final report to government, which is scheduled for the first half of 2026. The focus of the Action Plan on competitiveness and productivity is on the key actions that can be taken to strengthen insurance competitive productivity, which will in turn lead to improvements in our economic performance. The Action Plan was published on 10 September and has 85 actions across six teams, including Team 3, which focuses on creating and scaling more SMEs. The important thing is that it actually makes a difference on the ground and makes a difference to businesses, because the situation facing SMEs with regard to the costs is increasingly more unsustainable. We saw 848 insolvencies last year, and I do fear for what the number will be in 2026. But at the end of 2025, 80% of businesses from across all sectors who participated in the SME Business Sentiment Survey by Chartered Accountants Ireland and Grid Finance reported an increase in their costs, with a special mention of energy costs. And yesterday, it was reported that Irish business confidence has fallen to just 54%. Now, this is the lowest level since COVID-19 pandemic, and it's down sharply from 81% in the beginning of the year. Now, in contrast, globally, 74% of SMEs remain optimistic about the year ahead, with only a slight year-on-year decline. So, there is something we need to focus on here. Thank you, Cahirlec, and I thank the Deputy again. What I do is I focus on evidence. So, first of all, the measures that were taken in Budget 2026, the reduction in VAT rate for the hospitality sector. We're giving the sector 4.5% on its margin to assist with its costs. And we're saying we need 7% growth right across our tourism sector under our strategy, a new era for Irish tourism. We've also reduced energy costs, the 9% VAT rate on gas and electricity. We've increased Microfinance Ireland to €50,000 for low-cost loans into the sector. We'll be coming forward with a working capital programme to succeed the growth and stability loan of €500,000, which happened and was utilised over late last year. We also increased innovation voucher to €10,000 and, critically, we reduced a host of conditions for sustainability grants, like the Energy Efficiency Scheme, which gives €10,000 75% of the cost for small businesses, your shop, your butcher, your small business that really makes up the high street, which is so important to the fabric of rural life. And we'll keep doing that. We'll keep working to ensure we're doing our best to reduce those key costs for our businesses. The question the Minister must be asked is what's happening here at home. When we look at it globally, and you name all those initiatives that you are doing, but why are Irish business leaders growing even more pessimistic about the future? Confidence in projected revenue growth dropped dramatically at the end of last year, falling from 79% to 59% in just three months. And when businesses were asked about increasing headcount in 2026, this dropped from 59% to 46%. Now, these figures are not abstract statistics. They signal the slowing of growth, reduced hiring and growing uncertainty across local economies. So, we need to look at this Minister, and we need more actions. SMEs and family-owned businesses are the backbone of our economy, and they sustain communities, provide employment in rural and urban Ireland, and drive innovation and local enterprise. Now, the Programme for Government recognised the need for that comprehensive review of the SME cost structures, and businesses are now urgently waiting for those to make a real difference in their businesses, in keeping their doors open. Thank you, Gheerlach. I'm very acutely aware of the costs for doing business. That's why we've brought forward a forum. That's why we're going to take action in this regard. And that's why we've taken a suite of measures across Budget 2026. And we know what is happening in the Irish economy. 2.82 million people employed in our country. That's a record. We know that the average wage is €1,000 per week. That's a record. 45% options 2015. We know that all 13 sectors of the economy that are measured in the CSO data are growing. That's a record right now in this country. Our tax revenue coming in to resolve the infrastructure deficits we have is at a record. But I would have to point out, Deputy, that every area that I'm trying to stabilise small businesses, you have opposed. From sub-minimum rates, to the living wage, to sick days, every area that drives costs for businesses. If you ask a small business, a family business, what's your biggest driver, your biggest challenge? It's wages. Every business's biggest challenge is wages. We're assisting with that. And we're also helping real-range growth in the economy that we know our most vulnerable employees are outpacing the rate of inflation with their pay packet. Thank you, Minister. Question number four. Deputy Walsh again. Yeah. Goera Magath. Minister, that's why we wanted a PRSI rebate in the budget to help businesses with their costs and with the additional labour costs. We need good jobs. We need quality jobs. We do not need a race to the bottom, but we'll have that discussion on another day. I want to ask you here about, are you concerned about the levels of youth unemployment and what initiatives you're putting in place particularly to tackle it? Because I am deeply concerned with the consistently high level of youth unemployment here. The latest figures for January show it stands at about 12% with waivers between 12 and 14%. Thank you. Minister. Thank you, Deputy, for your question. The Programme for Government sets out a strong enterprise and fiscal framework that prioritises economic and employment growth with the target of creating 300,000 extra jobs by 2030. I am pleased to report that the Irish labour market saw sustained employment growth, rising labour force participation and record job numbers last year, indicative of a resilient performance. In total, over 2.8 million people are now employed in Ireland. The employment rate remains unchanged at 4.7% in January, broadly consistent with full employment. The youth employment rate, persons aged between 15 and 24 years, however, did increase slightly to 11.8% in January, but remains well below the EU and Euro area averages. It is not unusual for youth employment rates to be higher than those of the older cohort. This can be due to a lack of relevant work experience among youth workers, skilled mismatches or difficulty experiencing moving between education and employment, with clear seasonal and demographic patterns. However, many of these factors are temporary in nature as young people widen their professional networks and gain broader work and life experience, their employment prospects improve. It is also important that we focus on employment as well as unemployment, with the former clearly under the clear remit for my department. The statistics show that we have created a lot of jobs right across the economy last year, and our employment rate for youth people are very high by any margin, and certainly in comparison with our European peers. It is also important to stress that a huge number of our young people are either in education or training, as well as employment. I can point the Deputy to the CSO data for the very subject, in particular the CSO data, on a series of measures in regards to the numbers of young people not in employment, education or training. The so-called NEATS rate in 2023, for Ireland the rate was 8.6% relative to an average of 12.1% across the world. Thank you Minister. So we are doing so much right here in creating opportunities for young people. Deputy. You rightly say, you know, that this isn't unique to Ireland, but I don't think that's a reason for saying that everything is okay. So you look at the EU average, yes it's 15%, you look at Britain it's 15.3%, but there are actions that need to be taken here. When we have nearly three times, so for unemployment in general, we have nearly three times that rate for youth unemployment. Young people who complete their education are struggling to find well paid work. They deserve to have career prospects after completing their studies or training and having invested in obtaining a qualification. 44,600 people aged 15 to 24 years are currently unemployed in this country. And now when we say unemployed, obviously that's not people in education, but that's people who are available for work and willing to work. And I take on board what you're saying around the lack of experience and all that. But again, I think that there is something worrying happening here in youth unemployment. These people are not in any form of education or training. Thank you. And we need to put initiatives in place. Minister. Minister. I'd like to thank the Deputy for a question. I certainly disagree entirely with the suggestion that the Government aren't doing anything and are complacent on youth employment. Actually, if you look at the data, we see from the CSO's recent data that they've clearly identified temporary, deep demographic and seasonal effect, while also such as a surge in young people entering the labour force for the very first time. And that isn't a collapse on youth opportunity. It is in one sense supported through the creation by this Government across many sectors of job opportunities within engineering, within green technology, construction. And we've seen a huge number of new opportunities being created even last year in 2025. But we're also seeing that most of the recent increases in youth employment affect those without post-secondary qualifications. And I think that's why we have, as a Government, invested in programmes such as Springboard Plus, micro-creeds and expanded the apprenticeship network. And as I said earlier, we have an ambitious programme to continue to invest in apprenticeships to ensure that every young person can transition from learning and earn the right skills to enter the workforce correctly. Deputy. Minister, my view of the world is different to yours. We look at our own county and we look at youth reach and say youth reach is a really good programme in terms of addressing disadvantage and social exclusion there. We have waiting lists to get onto those programmes in Balanagh and in Kilshima. And we don't have either the physical space and able to be able to do the training with them and we don't have the personnel as well. I would ask you to particularly look at that. We cannot leave so many young people behind. There are real social and economic consequences for leaving so many people behind. And with adjustments things could be done. There also needs to be a joining up of further and higher education and the workforce as well, which I don't believe is happening to the extent that it needs to be happening. Again, in terms of investment in career guidance. Career guidance needs to start at a much earlier age. I would even say in national school in terms of people's subject choices than when you go into secondary school and taking it on from there. We don't have enough career guidance within the schools to ensure that young people can avail of the opportunities that match their interests and their skills. I would agree with some of your suggestions in regards to continued investment in key actions under the pathways for work. I know that that needs to provide enhanced support for young people and young job seekers. And also we have the establishment of the Employment and Youth Engagement Charter. And I think that's important to bring employers and young people together to tackle the barriers in regards to getting into the workforce. But as I said earlier, we need to continue to strengthen the partnership between our further education sector, the private employment sector, but also how government can support that. And I think we need to break the cycle that if there's no experience, then you're not entitled to a job. Or the fact that if there's no job, there's no experience. So I think this is about aligning policy with education reform. We are making an important partnership in that around expanding flexibility around blended forms of learning. And also, as I said earlier, the apprenticeship model. Thank you. And we will continue to do that. Thank you. Thank you. Ok. Thanks, you have. Yes? Thank you.