The head of the Irish ProShare Association (IPSA) has called on the Government to come good on its promises to implement a tax regime that encourages employee share ownership and increase growth and sustainability in the SME sector.
Gill Brennan will tell delegates at IPSA’s Annual Employee Share Ownership Day (ESOD18) today (June 21st) that the restrictive nature of the Government’s flagship Key Employee Engagement Programme (KEEP), launched in last year’s Budget, shows that it has failed to recognise the benefits of employee share ownership for the Irish economy.
Speaking at ESOD18 at Google’s HQ in Dublin, IPSA CEO Ms Brennan said: “Across the Globe there is overwhelming evidence showing that companies which are part or fully owned by their employees are more productive, more profitable and more valuable. Yet despite SMEs comprising 99.8% of the Irish economy, and employing 69.1% of the working population, successive governments have failed to support the long-term viability and sustainability of growing SMEs by encouraging this business model.
“The Key Employee Engagement Programme (KEEP) was meant to address this. It was heralded as an affordable, Revenue-approved scheme for start-ups and SMEs who want to reward their worker’s efforts and loyalty through employee share ownership. But there remain far too many restrictive exclusions in KEEP, most notably for companies in the Fintech sector, and few companies have expressed an interest in implementing the scheme.
Ms Brennan said that the Government needs to listen to both Irish and international experts if it wants workers, companies and the overall economy to benefit from employee share ownership.
She said: “Now is the time for the Government to recognise how positive and beneficial employee share ownership is as business model for Irish start-ups and SMEs. At ESOD18, we have gathered leading experts from across the globe who will show that where governments have implemented accessible and affordable share schemes for the SME sector, their economies and societies have benefitted from increased productivity, profitability, and a strengthening the business backbone of the economy.”
Ms Brennan said that under the current system many SMEs cannot easily participate in share ownership schemes due to the complexity of implementing them and the cost of entry. She believes that there is a willingness amongst the business community to recognise and reward their employees for their contribution, but they cannot do so presently.
She added: “If businesses are given the conditions to flourish, underpinned and supported by government in a mutually supportive contract, these same businesses will assume a wider responsibility to all stakeholders, employees, customers, suppliers and communities. Sometimes public money has to be spent for public good and for the overall good for society and economy.
“We are calling on the Government to look at the evidence and to stop over-complicating what should be a simple tax regime that is there to assist and encourage participation instead of creating barriers. They have done this for large global entities but continuously fail to look after their own indigenous enterprises.”
IPSA recently submitted its recommendations for changes to the KEEP scheme addressing concerns that the scheme is too narrow in focus and excludes many of the companies that it should be supporting.
ESOD will run on Thursday 21st June at Google HQ.