1. Business, The Economy and Government
Unit 6

2. Aims of this section Be able to:
List the ways in which the government creates a suitable climate for business.
Explain the ways in which the government affects the labour force.
Explain the impact of the economy on business.
Explain the impact of business in the development of the economy.

3. What is the role of government?
Which of these directly affect business development and growth in Ireland?

4. Local Government Helps businesses by:
Zoning of suitable land for industrial development.
Provide affordable housing in an area.
Waste & sewage disposal for households and businesses
Provision and maintenance of good infrastructure.
County Enterprise Boards help new enterprises.

5. Central Government Comprises of the Dail and Seanad.
Dail is the place where all revenue & spending decisions are made and new legislation is introduced.
Budgets and bills must be approved by the Seanad.
When the bill has been passed by the senate it must be signed by the president.

6. Reasons for Government Intervention
The government intervenes for a variety of reasons.
Legislation
To protect those who have dealings with business.
E.g. Companies Act (memo of assoc), Health and Safety
Protection of employees and consumers
Ensure the fair treatment of workers and consumers through legislation.
E.g. Employment Equality Act, Sale of goods supply of services Act.
Provides Infrastructure
Government capital expenditure is spent on roads, rail, ports etc so that the economy can operate efficiently.

7. Reasons for Government Intervention
Promotion of enterprise and employment
Through state agencies such as Ireland and Solas, the govt promotes employment. Grants and subsidies promote enterprise.
Environment
The government must take measures to protect the environment from damage, and the promotion of sustainable development.
E.g. Environmental protection Agency, An Taisce, Bord Pleanala.
To provide essential services
The government will provide unprofitable services that would not be provided by private companies. E.g. bus routes, electricity supply.
Public amenities such as libraries, museums, parks must be provided for the welfare of the citizens.

8. Creating a suitable business climate
It is the role of government to create a suitable climate in which businesses can thrive:
Taxation
PAYE
Tax Credits
VAT/Excise duties
Corporation Tax
Stamp Duty
Government Expenditure
Capital Spending
Current Spending

9. Creating a suitable business climate
Government Agencies
County and city enterprise boards
Enterprise Ireland
IDA Ireland
Solas (Fás)
Government Planning
Wages
Industrial Relations
Economic Policies
Low interest rates
Low inflation
Low unemployment

10. The Government and the Labour Force
As an employer:
The government is the single largest employer, employing approx. 250,000 workers.
Taxation:
Low rates of personal taxation result in consumers having more disposable income. Spending on goods and services increases demand which leads to job creation.
Low corporation tax provides incentives for companies to create jobs in Ireland.
Grants and incentives:
Given to both domestic and foreign companies to locate their businesses in Ireland providing employment.

11. The Government and the Labour Force
Government expenditure:
The government spends large sums on products and services from Irish businesses thus maintaining employment.
Investment in infrastructure leads to an increase in the number of workers employed in the construction industry.
Education spending:
Investment in education through training schemes, short-term courses, and schools and colleges result in a more skilled and employable workforce.