Business groups are warning that the two-metre rule must be reduced to one-metre if the country is to recover from the COVID-19 outbreak.

The Irish Small and Medium Enterprise Association (ISME) and the Irish Business and Employers Confederation (IBEC) both appeared before the Dáil COVID-19 committee this afternoon.

ISME Chief Executive Neil McDonnell also warned that the roadmap for reopening the economy is “ponderously slow” and that any future shutdowns would be “disastrous” for business and the economy.

He warned that without the proper supports, up to 9,000 small and medium businesses could close for good in the coming months.

Meanwhile, IBEC CEO Danny McCoy called the two-week quarantine regulations for people arriving into Ireland must be scrapped and for Ireland’s virus response to be built around an “extensive and systematic COVID-19 track and trace programme.”

Both men said the two-metre social distancing guideline must be reconsidered to allow businesses to recover in the coming months.

It comes after the Restaurants Association of Ireland (RAI) would have to remain closed if the rule was not reduced to one-metre.

"Blind-spot"

Mr McDonell said the Government has “fixated” on multinational companies and warned that smaller businesses “continue to be a blind-spot” for officials.

He said many officials “do not understand the systemic importance of the SME sector to the economy” and noted that last year SMEs generated more than half of PAYE and USC income in the productive economy last year.

He warned that the roadmap for reopening is “ponderously slow” he said many small businesses “would simply not survive a longer shutdown.”

“The recession would be prolonged and eventual recovery pushed further down the road,” he said.

“This would further undermine tax receipts related to employment and consumer spending and keep upward pressure on social protection expenditure. The only way to stop the fiscal deficit rising is through re-igniting growth. Economic recovery will increase tax receipts and dampen government expenditure.

“The current reopening road map is already ponderously slow for business and the economy. Any addition period of economic shutdown would be disastrous for business and the economy.”

Quarantine

Mr McCoy said the new quarantine restrictions must be removed and the two-metre rule reduced to one-metre.

He warned that businesses need a clear roadmap on when changes to the regulations may be considered.

"Uncertainty around the timing and application of rules will compound economic and social destruction," he said.

"It impacts not just on business workplace planning but as critically on the social infrastructure that supports our socio-economic activity."

He said the bringing in quarantine rules this late in the game is neither "logical or implementable" and is an "unnecessary impediment to recovery."

Payments

Mr McDonnell also warned that the COVID-19 supports will have to remain in place until 80% of the country gets back to work.

He said ending them any earlier will “trigger a substantial wave of redundancies, increased social protection spend, and reducing payroll taxes.”

He said there were “many missteps” regarding the rollout of the Pandemic Unemployment Payment (PUP) and the Temporary Wage Subsidy Scheme (TWSS) which could have been avoided if the Government was talking to small businesses.

“It is hard to say why this is the case, but our interactions with the upper reaches of our public service and Executive leave little doubt of their perception that big business is good and small business is bad,” he said.

“Big corporations pay their taxes, while small business owners fiddle their expenses.”

He said the decision not to link the PUP payment to previous income when it was first rolled out was “highly problematic” and said the two-tier system announced by Government last week must be revisited.

“No-one should earn more on the PUP than they did in their part-time employment,” he said.

“For this reason, the two-band structure for the PUP announced last week should be amended, and those who previously earned between €203 and €350 per week should only be able to claim a maximum of their previous weekly earnings.”

Policy

ISME is calling on the Government to take a range of actions to increase revenue without blocking economic growth.

Among the proposals is a reduction of the PAYE credit to €1,500 – which its says would raise around €150m a year – and adding a 3% USC solidarity charge to all PAYE income above €100,000 – which it says would raise around €300m a year.