ISME chief pleads for wage reductions

23 January 2009

Interview: Mark Fielding, ISME chief executive

By Larry Ryan

Soaring insolvency rates, slumped spending, uncooperative currency rates and rising costs. No wonder Mark Fielding, CEO of ISME (an organisation that represents small and medium-sized businesses in Ireland), speaks like a man whose people have been disenfranchised. In their hour of need, the ISME leader feels that his members don’t have a voice at the Government table.

“We are so uncompetitive now. Wage levels have to be cut. But the Government is a prisoner to partnership. They are running back and forward between the public service unions and IBEC. The thing is that 98% of our members aren’t represented by IBEC, so we have no say in this process.”

Mark paints an unhappy picture of the prevailing business environment for a small Irish firm. Access to cash is chief among the difficulties.

“The first big problem our members have is getting paid. ISME’s recent credit-rating survey showed that it’s taking longer than ever to get paid in Ireland. It’s big business not paying small business in time and, often, Government not paying small business on time. And it’s crippling the smaller firms.”

With debtors elusive, firms are forced to go cap in hand to banks for overdraft extensions and loans to keep the wolf from the door. And contrary to the public message sent out by financial institutions, Mark feels his members are not being greeted with open arms.

“The banks say that they are open for business but 56% of our members were refused credit extensions in the three months leading up to November. Of the 44% who supposedly got loans, more than one-third weren’t able to take them up because of onerous conditions imposed by the lenders.”

He sees no respite in the Government’s decision to bring forward corporation tax deadlines. “Paying the tax isn’t the problem for small firms because they aren’t making profits to be taxed. But early taxation payments for larger firms will only squeeze cashflow further and make it even harder for our members to get paid.”

It is costs, however, that remain the biggest worry. Mark points to Ireland’s uncompetitive labour and energy costs and other overheads, highlighting one startling statistic. “The cost of waste disposal in Ireland is three times higher than in the next most expensive country in Europe.”

He sees labour cost reductions as the only way out of our current predicament, but holds out little hope of action.

“We are looking to Government for leadership but you can’t lead by consensus. Someone has to stand up and make the hard calls and put vested interests aside.”

Why not subscribe to our free weekly newsletter or RSS feed?

<< Back