After a frenetic three-week campaign, General Election 2024 has essentially left us where we began – with a likely Government led by Fianna Fáil and Fine Gael albeit this time without the Greens. 

The precise makeup of the final coalition is as yet unclear. However, given that the outgoing coalition’s collective seat take will likely not leave them far off the 88 seats needed to command a Dáil majority, it is safe to say that whoever gets the nod to make up the numbers won’t have the same bargaining power to influence policy as some previous smaller coalition partners may have had. 

Against this backdrop, it’s safe to assume that the next Programme for Government will largely, if not entirely, be dictated by the policy priorities set out by Fianna Fáil and Fine Gael in their general election manifestos. So, what might this mean for small businesses? 

Addressing the cost of doing business 

In their respective pre-election pledges, both parties were keen to highlight their awareness of the rising costs of doing business. In Fianna Fáil’s case, they pledged to address this by establishing a new “Cost of Business Advisory Forum” to conduct a review of all current business costs and taxes. 

According to the party’s manifesto, “this forum will be consulted before introducing new legislation or policies that affect small businesses.” 

Likewise, in its manifesto, Fine Gael took a similar tack by reasserting its commitment to apply what it calls the “SME test” to any new legislation coming down the track – a test that would essentially require all departments to first assess the impact on small businesses of any new measures being proposed prior to enactment. 

So, with both parties essentially singing from the same hymn sheet on the issue, it is likely that we will see the announcement of some sort of new initiative designed to limit the amount of new regulations that could further add to the cost burdens of small businesses.  

Employers’ PRSI  

Again on the issue of reducing business costs, both parties also made specific commitments to reduce the Employers’ PRSI burden where lower earning workers are employed. 

While Fine Gael favoured a temporary, three-year PRSI rebate based on the number of lower-earning workers on a company’s payroll, Fianna Fáil pledged an outright reduction to the lower rate of employers PRSI by 1.5 percent. 

The logic behind the latter proposal (we know this because the Institute’s pre-election manifesto originally proposed it) is to mitigate the concurrent 1.5 percent uptick in payroll costs due to hit many employers in late 2025 through the introduction of pensions auto-enrolment. 

So again, with both parties essentially aligned here, it’s fair to say that a reduction or rebate of the lower rate of Employers’ PRSI in some format will also likely feature in the next Programme for Government.  

VAT on hospitality 

The issue of VAT on hospitality was a notably contentious issue in the run up to Budget 2024 with the Government ultimately refusing to reinstate the reduced nine percent rate despite extensive lobbying from the sector. 

However, the way in which each party subsequently approached the issue in their election manifestos is perhaps telling of a policy fissure between the two. 

Fine Gael clearly favours a reduction, albeit to a midway rate of 11 percent while Fianna Fáil is notably silent on the issue in its manifesto, instead placing its focus on maintaining VAT on gas and electricity bills at nine percent for the next five years. 

How this difference in approach will ultimately play out in the final Programme for Government is as yet unclear. However, Fine Gael’s pledge to implement a reduction will no doubt have created an expectation from the hospitality sector that some sort of action will be taken on reducing the rate. 

Energy supports 

High energy costs continue to be an issue for many small businesses and the manifestos of both Fianna Fáil and Fine Gael have again sought to tackle this through further one-off grant schemes. 

In Fianna Fáil’s case, the party has pledged to introduce a successor to the Increased Cost of Business/Power Up grant schemes to help hospitality and retail businesses deal with higher energy bills. 

Likewise, Fine Gael has promised a new energy cost grant scheme, “to help businesses lower their energy costs, enabling them to operate more sustainably.”

Given that the two parties appear to be broadly aligned on the issue, a new round of temporary energy support grants seems likely. 

However, what is less clear is how the announcement of these relatively piecemeal measures will be received by businesses, particularly given the slow uptake of previous such schemes over the past two years.

Stephen Lowry is Head of Public Policy at Chartered Accountants Ireland