Dáil Éireann Debate, Thursday - 19 February 2026
69. Deputy James O'Connor asked the Minister for Enterprise, Tourism and Employment his strategy to address the rising cost of doing business, in particular for the SME sector; his plans for 2026 that will aim at improving cost competitiveness in areas such as energy, insurance, labour and so on; and if he will make a statement on the matter. [13247/26]
View answerThe Government fully recognises that small and medium enterprises have faced significant cost pressures in recent years, driven by higher energy prices, global supply chain disruptions and international economic developments. Despite these ongoing challenges, progress is being made to support SMEs, with the Government taking proactive steps to implement multiple measures to reduce business cost and ease regulatory pressures. The Government is pleased to note, there are emerging signs of improvement, with the CSO’s Wholesale Price Index showing a 6.4% decrease in the year to December 2025.
My Department is delivering on the Programme for Government with two priority commitments, to improve the business cost environment with the establishment of the Cost of Business Advisory Forum in June 2025 and strengthen Ireland’s competitiveness position with the publication of the Action Plan on Competitiveness and Productivity in September 2025.
Since mid-2025, the Cost of Business Advisory Forum has served as a central platform for business representative groups - alongside Government Departments, State Agencies and Regulators - to examine a series of agreed thematic areas, which included energy costs and security of supply, insurance costs, planning regulation and infrastructural delivery, and legal costs. In early 2026, two remaining meetings are scheduled to discuss regulatory costs and payment, banking and financial services.
With the findings and feedback from the Forum, work is underway to present a final report, with recommendations which identify practical actions that can reduce the cost burden on SMEs and support a more competitive business environment. The Forum expects to present this report to Government, with an indicative time frame in H1.
In addition, Budget 2026 was a pro-enterprise Budget and was framed in consideration of the Action Plan on Competitiveness and Productivity and the Programme for Government 2025: Securing Ireland’s Future. The Budget included a range of new tax measures, alongside changes to existing measures, to support the SME sector. These included:
• A reduction in the Hospitality VAT rate from 13.5% to 9%, which will be introduced from 1 July 2025. This reduction will apply specifically to food/catering and hairdressing and addresses concerns raised by the sector about business viability.
• The Employer PRSI threshold was increased to ensure that employers do not pay the higher rate of PRSI for full-time workers earning the minimum wage.
• The lifetime limit of the Revised Entrepreneur Relief was increased from €1m to €1.5m, which provides a significant potential benefit for scaling companies. The relief applies a CGT rate of 10% on gains from the disposal of chargeable business assets, a reduction on the standard rate of 33%.
The Action Plan, reflects a whole-of-Government approach, which addresses drivers of domestic competitiveness and firmly focuses on areas within our domestic control. The Action Plan contains a total of 85 actions, across six themes. The fourth theme is ‘Regulating for Growth and Controlling Costs’ – which has 5 priority actions addressing the costs of doing business in Ireland. These are set out across three distinct areas: “Better Regulation”, “Legal Costs”, and “Competition and Costs”. Specific actions include:
• The Department of the Taoiseach to coordinate a range of actions aimed at regulatory reform across Government Departments, including the establishment of a central Economic Regulators Forum.
• The introduction of a “Red Tape Challenge” across Government to significantly reduce regulation for SMEs.
• The implementation of the outstanding recommendations from the Review of the Administration of Civil Justice: Review Group Report.
Ireland's enterprise agencies also continue to play a key role in working with companies to address costs and strengthen competitiveness. In particular, the Local Enterprise Offices (LEOs), based within the 31 local authorities, assist small businesses across all sectors. The National Enterprise Hub, administered by Enterprise Ireland, offers businesses access to information on more than 250 Government supports for which they may be eligible. The National Enterprise Hub, operated by Enterprise Ireland, provides access to information on more than 250 Government supports available to businesses.
The Government remains committed to building on this progress, and the forthcoming Enterprise 2035 strategy will set out a long-term vision for enterprise growth, competitiveness and job creation over the next decade.
