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IBEC economist Fergal O'Brien says government plans for Budget 2013 may harm job creation. Mark Stedman/Photocall Ireland
Budget 2013

IBEC demands 'pro-jobs Budget' as forecast for 2013 is lowered

The business group says plans to increase PRSI or make employers cover sick will hamper job creation.

THE EMPLOYERS’ GROUP, IBEC, has demanded that the government do its utmost to concentrate on job creation in the 2013 Budget – saying some of the proposals being considered go against the government’s objective of getting people back to work.

The calls come as the group releases its latest Quarterly Economic Outlook, in which it lowers its expectations of economic growth in Ireland next year – a reduction it attributes to “anaemic economic growth in the rest of Europe and heightened consumer worries at home”.

The group now predicts that the Irish economy will grow by 0.8 per cent in 2012, having originally forecast growth of 1 per cent. Its forecast for 2013, which had previously stood at 2.3 per cent, has been lowered to 1.8 per cent.

IBEC says some particular proposals reportedly under consideration – such as Joan Burton’s initiative forcing employers to cover the first few weeks of employee sick pay, and the possibility of increasing PRSI – could cost jobs, and undermine ambitions to create new employment.

“Companies are putting together budgets and business plans for 2013,” IBEC chief economist Fergal O’Brien.

“If employment costs rise they will be much less likely to take on new staff. Some will be forced to downsize or go out of business.

“The focus must be on cutting public expenditure and raising revenue in a way that is least damaging to growth. The most damaging thing Government could do in Budget 2013 would be to add to the cost of employment.”

IBEC’s forecasts also include a fall of 2 per cent of consumer spending.

In full: IBEC’s Quarterly Economic Outlook (PDF) >

Budget 2013: Noonan pledges no increase in income tax rates, bands

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