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BP SURVEY Accountants Many businesses have reduced their cost base to cope with a reduced income level. However, excessive rent and service charges by landlords fixed in the Celtic Tiger era have not been reduced, and this is a significant factor forcing many businesses into liquidation. To get the economy moving, consumer spending has to be increased. Employers should be incentivised to take people off the dole, with salary contributions and training grants being offered across the board. Jim Stafford Friel Stafford As a specialist corporate recovery and insolvency firm, it is a reflection of the times that we have never been busier. A significant driver of receivership work this year will be the number of developers moving to the UK to become bankrupt, which will force the banks to appoint receivers to protect their assets. The government has simply been too slow in bringing forward personal bankruptcy reform. A negative side effect of the economic crisis is that it is taking much longer to sell property, which means that all of the insolvency practices are carrying forward a backlog of work. Selling apartments, particularly, has become more difficult following the passing of the Multi-Unit Development Act. Jim Stafford, Friel Stafford Certain sectors, such as printing, hospitality and construction, will continue to decline, but other sectors are performing strongly, such as agriculture and the food and drink industry. While our competitiveness as a nation is improving, particularly with commercial rents declining, the government needs to become more decisive on the real issues. In particular, the Croke Park agreement needs to be urgently re-negotiated. It is staggering that the government has done little to reduce the future bill for public pensions, which currently stands at approximately €120bn, a figure that dwarfs the cost of the banks bailout. Tom Fitzpatrick FMB Chartered Accountants In my view, the Irish economy has been bouncing along the bottom for the last 12 months and I expect a modest improvement towards the end of 2012, on the assumption that the government is effective at cutting costs and that the eurozone crisis stabilises. To foster confidence, banks need to offer mortgage facilities to creditworthy Irish purchasers of residential property. An increased number of transactions would have the effect of bottoming out the continuing devaluation of residential Tom Fitzpatrick, FMB property. Over time, an increase in property values would improve confidence and cause increased spending by property-owning consumers. This would be an important step in rehabilitating the indigenous economy. Guiding Your Business Through Uncertain T imes 64
BP SURVEY Accountants Gerry McInerney McInerney Saunders Liquidity and credit conditions have deteriorated in comparison to this time last year, primarily due to all of the banks seeking to deleverage at an increasing pace. It’s as if they are attempting to achieve a reduction in their loan books before it becomes impossible for them to do it in an even more depressed environment. I don’t think any right-minded person believes that the government is not already acting in the best interests of the economy. We might deplore certain aspects of the public sector cost structure and the inefficiencies and work practices that bear no relationship to how the private sector operates. Unfortunately, it seems that the government cannot change these things overnight. But there needs to be strong leadership that comes out and drives the public debate that Gerry McInerney, McInerney Saunders brings about cultural change. This process in itself will foster confidence both nationally and internationally. If opposition parties are to have any credibility, they need to seriously enter this debate, not as an opposition to government but as an opposition to inaction around such change. Today, everyone is looking for value; a fair return for a fair wage. Let’s have benchmarking. Brian Conroy Horwath Bastow Charleton In talking to our clients, most businesses appear to have reached the bottom and are showing more signs of optimism for 2012 and beyond. Business that are heavily exposed to domestic consumer spending, such as retailers and hotels, are the most vulnerable because of the poor consumer confidence and the impact of fiscal corrections. However, even in these sectors we are seeing early indicators that the worst is behind us. We are encouraged by the government’s support of business investment by SMEs through measures such as R&D grants, film relief, the Employment and continued on page 66 65
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BP SURVEY<br />
Accountants<br />
Many businesses have reduced their<br />
cost base to cope with a reduced income<br />
level. However, excessive rent and service<br />
charges by landlords fixed in the Celtic<br />
Tiger era have not been reduced, and this<br />
is a significant factor forcing many<br />
businesses into liquidation. To get the<br />
economy moving, consumer spending has<br />
to be increased. Employers should be<br />
incentivised to take people off the dole,<br />
with salary contributions and training<br />
grants being offered across the board.<br />
Jim Stafford<br />
Friel Stafford<br />
As a specialist corporate recovery and<br />
insolvency firm, it is a reflection of the<br />
times that we have never been busier. A<br />
significant driver of receivership work<br />
this year will be the number of<br />
developers moving to the UK to become<br />
bankrupt, which will force the banks to<br />
appoint receivers to protect their assets.<br />
The government has simply been too<br />
slow in bringing forward personal<br />
bankruptcy reform.<br />
A negative side effect of the economic<br />
crisis is that it is taking much longer to<br />
sell property, which means that all of the<br />
insolvency practices are carrying forward<br />
a backlog of work.<br />
Selling apartments, particularly, has<br />
become more difficult following the<br />
passing of the Multi-Unit Development<br />
Act.<br />
Jim Stafford, Friel Stafford<br />
Certain sectors, such as printing,<br />
hospitality and construction, will<br />
continue to decline, but other sectors are<br />
performing strongly, such as agriculture<br />
and the food and drink industry.<br />
While our competitiveness as a nation<br />
is improving, particularly with<br />
commercial rents declining, the<br />
government needs to become more<br />
decisive on the real issues. In particular,<br />
the Croke Park agreement needs to be<br />
urgently re-negotiated. It is staggering<br />
that the government has done little to<br />
reduce the future bill for public<br />
pensions, which currently stands at<br />
approximately €120bn, a figure that<br />
dwarfs the cost of the banks bailout.<br />
Tom Fitzpatrick<br />
FMB Chartered Accountants<br />
In my view, the Irish economy has been<br />
bouncing along the bottom for the last<br />
12 months and I expect a modest<br />
improvement towards the end of 2012,<br />
on the assumption that the government<br />
is effective at cutting costs and that the<br />
eurozone crisis stabilises. To foster<br />
confidence,<br />
banks need<br />
to offer<br />
mortgage<br />
facilities to<br />
creditworthy<br />
Irish<br />
purchasers<br />
of residential<br />
property.<br />
An increased<br />
number of<br />
transactions<br />
would have<br />
the effect of<br />
bottoming<br />
out the<br />
continuing<br />
devaluation<br />
of residential<br />
Tom Fitzpatrick, FMB<br />
property.<br />
Over time, an increase in property values<br />
would improve confidence and cause<br />
increased spending by property-owning<br />
consumers. This would be an important<br />
step in rehabilitating the indigenous<br />
economy.<br />
Guiding Your <strong>Business</strong> Through Uncertain T imes<br />
64
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