'It's going to be one of the toughest budgets ever'
My budget: David Walsh company chief executive
David Walsh is the chief executive of Netwatch, a Carlow-based business that specialises in remote video surveillance, chiefly of commercial property. Established in 2003, it employs 100 people in the State, and 20 more outside the country.
“When we started, there were only three people in the business,” says Walsh. He is grimly awaiting budget 2013. “I think it’s going to be one of the toughest budgets ever. I think the Government will spread the correction in terms of our deficit, and I know there is fear in the small and medium size business community, such as ours.
“Companies that are barely getting through the recession are terrified about the cost of doing business – commercial rates and local authority charges in particular . . . The budget should be about trying to create jobs, and putting everything in place to maintain existing jobs. The Government can do that by not raising the cost of doing business in Ireland.”
Walsh’s key hope is that the cost of doing business, particularly labour, remains the same. “I wouldn’t be suggesting the minimum wage would be dropped, but I would suggest that PRSI wouldn’t be increased. I would not like to put any further burden on employers, or introduce mandatory sick leave pay for four weeks. We do offer that ourselves to our employees, and it’s a noble thing to see happen in good times, but a lot of companies can’t afford it at present.”
He is also concerned that the cost of diesel will increase again. “We have 25 vans on the road in Ireland, and so any increase in fuel would have a huge bearing on the cost of doing business.”
Netwatch invest heavily in research and development. “We can currently write that off against our tax. In terms of our international expansion, it’s fundamental.”
What Walsh thinks is likely to happen is that “there will be an increase in VAT on certain products including fuel, and that will make us less competitive”.
He says that businesses, unlike individuals, are not mobile. Whatever this budget has in store, businesses can’t emigrate. “Leaving the country is not an option. Small and medium businesses can’t move anyway.”
He hopes that there will be come creative thinking. “There are two ways to do it. Encourage new start-up businesses, and encourage existing businesses. If the Government is serious about growing business, there should be tax rebates for companies investing abroad; ie, a rebate of 50 per cent on profits for the first 12 months. That would take a lot of risk out of investing abroad.”
Walsh is clear on the key factor in galvanising the economy: “Job creation.” “There are 200,000 small and medium businesses in the country.
“If we could all be encouraged to take on one extra person each, we would half the unemployment rate.”