Generous tax breaks should be granted for research and development (R&D) and to the self-employed, according to small business lobby group ISME.

In a pre-budget submission, ISME also demands the junking of benchmarking and the privatisation of public sector jobs.

And it cautions the Government against raising taxation rates and borrowing without first confronting "wastage" in the public service.

ISME chief executive Mr Mark Fielding said: "It is imperative that the wealth creators of the business world are not continuously relied upon to 'bail out' the public sector, which is inefficient, overmanned, under utilised and, in general, acting as a drain on scarce resources."

A 10 per cent tax rate for start-ups in the first five years of business, 100 per cent capital allowances on plant and equipment for new companies and double tax relief on all R&D expenditure also feature on ISME's list

Dividend relief for owner/managers, the expansion of the threshold of payment of VAT on a cash-receipt basis, and the reintroduction of indexation to capital gains tax are other key planks of the submission.

Mr Fielding said: "This year's Budget provides a unique opportunity to stimulate the economy by providing trust in and support to the SME sector by promoting a distinct 'small business first' policy.

"This would ensure that future economic growth is based on a flourishing indigenous sector and, when the global economy improves, that Irish indigenous business is placed at the forefront to take advantage."