Budget too focused on taxes - Ibec

Employers group Ibec has expressed disappointment at the Budget, saying it could have done more to create jobs and restore competiveness.

It said that the €6 billion adjustment, while necessary, could have been done in a way that was "less damaging to economic growth and employment".

Ibec also said the Government's proposals were too heavily focused on raising tax revenue and cutting capital expenditure.

"More should have been done to reduce current expenditure, which remains too high given the major fall in tax revenue," Ibec director general Danny McCoy said.

"The size of the public sector is out of line with the size of the economy and more action is needed to address this imbalance."

Ibec said the reduction in employer PRSI relief would cost Irish businesses about €90 billion annually and that cuts to working-age welfare rates would result in higher employment costs.

It also said the increase in excise on petrol and diesel was a cause for concern.

"When the carbon tax is added to this over coming budgets it will lead to a significant loss of competitiveness for Irish business," Mr McCoy said. .

Ibec welcomed the internship programme, which create opportunities for graduates and limit the increase in emigration.

The Small Firms Association said the measures taken in the Budget were not sufficient to improve consumer confidence and get people spending again.

It said the Budget should generate greater certainty among small businesses but that the Government had ignored the "critical need" for credit among small firms.

"The banks are commercial entities and will not move from risk assessment criteria about what is a viable business and therefore we will still require government intervention to breach this gap, with some form of risk sharing scheme between government and the banks," association chairman Dr Aidan O'Brien said.

The association welcomed the retention of the 12.5 per cent corporation tax rate and the extension of the PRSI incentive scheme.