Family-owned businesses want the State to establish a recovery fund to assist in keeping an estimated 700,000 people in employment after the Covid-19 crisis.
John McGrane, director of the Family Business Network, warned at the weekend that Irish companies would still face repaying €270 billion in debt along with deferred liabilities such as local authority rates after the pandemic.
His organisation is calling on the Government to establish a recovery fund that would give cash to businesses, including those his network represents, to aid in surviving the economic fallout from coronavirus.
Mr McGrane argued that deferred debt risked killing businesses that survive the crisis as many employers will be unable to continue trading with the burden of bank liabilities, local authority rates and other charges.
“It’s time to talk about getting cash into employers across the country, not least those family-owned businesses that help underpin the economy,” Mr McGrane declared.
He explained that creating a fund to support businesses in trading through the period after the crisis would mean that the Government receive income tax, VAT and avoid the “massive” welfare cost of paying unemployment benefit to jobless workers.
Mr McGrane said that his organisation believed that providing cash to businesses to maintain people in productive jobs would aid the recovery more effectively than paying welfare.
He pointed out that workers would spend this cash on the goods and services they needed, helping to support demand and revive economic growth.
He noted that Switzerland introduced a scheme last week through which its government would provide up to 500,000 Swiss francs (€474,000) to small businesses that satisfied conditions set out on a two-page form. "That's the direction we need to be going," Mr McGrane said.
‘Recovery bonds’
Family businesses employ about 700,000 people and generate about 50 per cent of the Republic’s wealth. About three quarters of all Irish-owned enterprises are family businesses.
Mr McGrane acknowledged that it was impossible to say how much money taxpayers should pump into the scheme. His organisation is suggesting that new “recovery bonds” and the State’s rainy day fund could provide the cash needed.
He agreed that it could not stay in place indefinitely. However, Mr McGrane said that at the “very least” the existing Government temporary wage subsidy scheme, designed to support jobs through the crisis, should be extended.
“Irish family-owned businesses are not expecting charity but a package that’s fair to both the State – by avoiding massive welfare payments and loss of income – and to Irish employers,” Mr McGrane said in a statement.
