The Chamber of Commerce and the Federation of Industry said today that the budget lacked measures aimed at reducing costs to enterprise.

“It was expected that in the light of the difficult economic climate which enterprise is facing today, the government would have introduced a mix of measures which produce results both in the medium and long term, but more importantly in the short term to ensure that manufacturing in particular would be able to mitigate the additional burden they have been made to carry as a result of the new energy tariffs. In terms of the announced schemes for business, it is noted that these could fall short in mitigating the effect of the increases in utility tariffs,” the two organisation said in a statement.

They said that in the context of the international economic situation and the possibility that this could have negative effects on local production, the Budget efforts towards stimulating externally induced cost-cutting in business to meet short-term difficulties fall short of any tangible measures.

They appreciated, however, that the government opted for a sustainable development approach.

“The investment measures announced for infrastructural works; environmental projects; re-skilling, education and training; alternative energy projects and business incentives in a variety of sectors including SMEs, start-ups and tourism should also support economic activity. What one expects from these outlays is an enhanced human and social capital development and not mere increases in monetary outlays.

“With regards to fiscal and financial incentives the Budget falls short of setting performance targets of the incentive effect that such schemes are designed to create,” the two organisations said.

They also complained of an absence of new access to finance tools but welcomed the measures to promote a higher take-up of energy efficiency and renewable energy generation equipment.

The decision to reduce excise duties on spirits was a step in the right direction but it would have been preferable for the gap with nearby countries to be closed further, the Chamber and the FOI said.

The tax cuts, while positive in theory, were seen as being marginal and would have a relatively minor effect on household savings and consumption given the increase in utility prices.