The Small Firms Association (SFA) has called for a €300 million once-off rebate to business this year, as part of its pre-Budget submission. It has also called for greater research and development incentives.

The SFA says a new approach to local government financing is required and that it is placing a huge burden on the business community. It says the €300 million is the amount local authorities have failed to use from the Local Authority Fund from 2004 for roads, houses and other services.

The SFA says payment requests for commercial rates should be accompanied by a detailed analysis of expenditure and benefits which accrued to the individual business. "Future rate increases must not be in excess of inflation and tied to agreed performance targets," it says.

The lobby group says a tax allowance of 150 per cent should be available only to SMEs on R&D spending. It also urges that the number of researchers should reach 9.3 per 1,000 of total employment by 2010, from 5.1 per 1,000 in 2001.

On taxation, it says that the ceiling on employees' PRSI should not be removed as it would sharply increase the tax wedge and lead to wage pressure on the part of those earning over the current ceiling. It says there is considerable scope to index tax credits and significantly extend the standard rate tax band.

It also says there should be no increase in excise duties, but the Government should commit to lowering VAT, which it says is out of line with competitor countries and is exacerbating the inflation rate.

On childcare, it says affordability remains a key issue for parents and business. "The SFA is strongly advocating Government support for working parents on the basis of receipted childcare costs."

It says this will ensure the availability of places and quality of childcare will improve across the board.

The SFA warns that the issue of childcare is wider than simply providing tax breaks for parents. It says that if extra places are not provided, then merely providing tax breaks will just increase the cost of childcare and further reduce womens' opportunities to return to work.