What the Irish tech and internet sector wants from Budget 2013

4 Dec 2012

Six Irish tech leaders express their hopes and desires from tomorrow’s tough Budget. Their suggestions span PRSI breaks for start-ups, tax reliefs, strategic education investments, new State procurement rules and provisions that will boost the Irish video games industry and e-commerce.

Sean Blanchfield, CEO, Scale Front:

Lower tax burden on young companies, cognisant of the fact they are not yet profitable and don’t benefit from the low corp income tax rate. The largest cost for start-ups is salaries. Providing an employer’s PRSI break for the first few years would have a huge impact. Creating a start-up employee tax credit would also permit start-ups to pay fair take-home salaries with less financial pain. These measures would result in a start-up’s meagre revenues and/or investment going a longer way.

Introduce a new procurement rule that requires a small fraction of public spending on IT to be preferentially spent with small indigenous companies. The revenue thus directed at innovative start-ups could catalyse major indigenous growth in IT, generate many profitable companies ready for global expansion, as well as modernising government and public IT systems.

Joan Mulvihill, CEO, Irish Internet Association:

Budget 2013 is an important one for the tech industry. While Ireland performs strongly in this sector, it cannot afford to be taken for granted. We would welcome continued investment in the critical area of skills development both long term strategic investment in primary, secondary and third-level education but also continued support for conversion courses and the implementation of the tech visa.

We would welcome support through the introduction of some tax reliefs for traditional businesses adopting e-commerce and cloud services, as this will sustain employment in existing businesses and allow them to invest in growing their business.

Barry O’Neill, chairman, Games Ireland and CEO StoryToys

I’d like to see more than just lip service being paid to the needs of the games industry. For two years we’ve been hearing about the Government’s commitment to this sector. We’ve seen a Forfás report recommending all sorts of wonderful supports, but in reality nothing has happened.

The measures that need to be taken to transform the games industry are:

·      Overhaul of our not-fit-for-purpose R&D supports to include the creative aspects of game development.

·      Introduction of a jobs-growth linked income tax holiday to attract highly skilled game producers to work in Ireland (as Canada has).

·      Better incentives for investment in early-stage start-ups, to increase the level of capital access for early stage entrepreneurs.

Games Ireland brought a group of the world’s most senior executives in the games industry to Dublin so that Ireland would become Europe’s most attractive locale for games companies.  

So far, the most effective result for Europe from the October 2011 meeting was that the UK grabbed the idea and ran with it.

Dara O’Mahony, managing director, Buyersclub.ie

As we glimpse the first signs of recovery, entrepreneurs in all industries will emerge to exploit countless opportunities as the economy “resets”.  Domestic entrepreneurship is key to our recovery and to a reduction in unemployment.

We must be sure that no measure introduced in the Budget discourages this behaviour or raises unnecessary barriers as that would certainly be to our disadvantage. In fact, we must introduce policy measures that recognise the risk taken by entrepreneurs and do what we can to reduce downside risk that is at the heart of the entrepreneurial calculation.”

Rory O’Connor, CEO and founder, Scurri

We need to reduce duty on diesel for parcel carriers involved in e-logistics. Ireland has one of the largest and most developed e-commerce markets with our nearest neighbour in the UK, online purchases are growing by over 11pc per year, expected to exceed £221bn by 2016 when over 21pc of all UK purchases will occur online.

Seventy per cent of shopping cart abandonment in e-commerce is due to consumer fears about shipping. Our ability to compete in e-commerce is directly related to shipping costs and efficiencies in e-logistics. If Irish e-commerce merchants can access competitive shipping rates we will be able to create thousands of jobs in both the e-logistics and e-commerce sectors in the next few years, if we can’t, however, we will be left out of the party.

Additionally, the e-commerce sector in Ireland needs more qualified and experienced professionals. We need an apprenticeship-style training model where participants can convert from unemployment to employment by learning real up-to-date skills and real work experience. The qualification needs to be at a high level (post-grad diploma or masters). It should be highly intensive with high rewards for both host employer and participant, someone like the IIA would be ideal to develop and run this programme.

Kealan Mccluskey, founder, Jig.ie

1.     Stop pretending this that and the other isn’t tax. It confuses people in a time of crisis and displays a lack of statesmanship.

2.     Introduce smart taxing, ie, all car tax collected per litre at the pumps (a) polluter pays (b) dismantle the costly staffing and bricks-and-mortar apparatus required to collect it. This also means all cars on the road are taxed and there’s no clowning around with gardaí and courts wasting time and money.

Vise grip image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years