Meet with retail employers to understand our concerns about costs: RGDATA challenges Taoiseach

RGDATA has called on Taoiseach Leo Varadkar to meet with independent shopkeepers to hear directly their huge concerns about the significant cost increases being lumped on local employers by Government. You can read the letter here.

RGDATA is also urging all members to make your voices heard to local TDs about the cumulative impact all the Government measures will have on your business.

RGDATA is asking its members to share views and keep the organisation informed about views on the Budget and the how effective the proposed 50% once off rates rebate (only for those paying less that 20k in commercial rates) will be to support businesses in managing the increased costs.

In her letter to the Taoiseach, RGDATA Tara Buckley wrote “I refer to your post Budget interview on the Pat Kenny show on Newstalk on Wednesday 11th October 2023. In particular I noted your dismissal of concerns expressed by businesses about the potential adverse effects of increased employment costs on the viability of businesses and the retention of employment levels in those enterprise.

Remarks

“The essence of your remarks was that you do not believe the concerns expressed by SMEs and their representatives and that effectively they are crying wolf by claiming that increased business costs represent a significant threat to their businesses. The reaction to your comments among the retail entrepreneurs that RGDATA represents has been a mix of anger, disappointment and disbelief.

“There is anger that as Leader of the Government you are failing to grasp the serious challenges facing domestic businesses dealing with a rapidly high cost operating environment – in circumstances where the largest element of these costs are due to actions taken by the Government. In particular, employment measures that the Government is proposing will add a minimum of an additional €4,200 per employee, per annum for each full time employee working in a retail outlet.”

This is calculated by RGDATA as an additional annual cost per employee due to the Increase in National Minimum Wage of €3,154.00.
The Additional Bank Holiday in February will cost €110.00 per employee.
Additional Statutory Sick Leave will cost €550.00 per employee per annum.
Auto Enrolment comes in at €386.00 meaning the subtotal for each employee is circa €4,200.00.

No capacity

“Just precisely where do you and your Government colleagues expect employers to find and fund this extra €4,000 per employee per annum? These are low margin businesses operating in extremely challenging local markets, with no hidden reserves and no capacity to just magic up
additional turnover from local customers. They are already facing pressures (including from Government) to reduce retail prices.”

The letter continued “There is also disappointment that the measures introduced in the Budget to address increasing employment costs are wholly inadequate. The initial indications are that the proposed rates rebate scheme will not apply to many SME retail employers who will require the support and in any case will be pitched for those who are eligible at too low a rate to be make a contribution to costs. And all of this in a context where the Government is failing to cover staff costs which should be covered by PRSI and passing those costs directly to employers to meet.

Disbelief

“And there is disbelief that the measures that have been proposed have been advanced by a Government that purports to be pro enterprise.
The reality is that the cumulative impact of the measures that have been announced will directly and adversely impact the very people who get up early each morning to open their businesses, give employment and provide a local service to their communities.

“Regrettably the penny has not dropped in Government Buildings that SMEs just cannot afford the range of increased employment costs that have been sent their direction. And this will cost jobs, employment hours and ultimately destroy the viability of small indigenous employers.
If you continue to have doubts about the integrity and efficacy of their concerns, can I invite you to meet with some of the retail employers that I represent so that they can show you at first hand how the costs that the Government is lumping on them will undermine their businesses?
I’d be happy to gather some retailers from your own constituency and the constituencies of Ministers Coveney, McGrath and Donohoe, so that you can review your assessment as to whether retailers are crying wolf or in fact have a legitimately grounded concern about the
impact of the Government increases either introduced or coming their way.”