Adrian Cummins of the restaurants Association says that members will vote for whichever party puts the 9pc Vat rate on its manifesto
Mr Cummins said there is increasing anger within the industry regarding the lack of support for indigenous businesses, with calls for politicians to engage directly with local business owners and include the 9pc VAT rate in future financial discussions to avoid further closures.
He said that, despite the availability of surplus tax revenue, the government chose not to reduce the VAT rate for the hospitality sector and instead offered a limited grant that is unlikely to significantly alleviate financial pressures on businesses.
The hospitality industry is facing severe challenges, with approximately 700 food-led businesses having closed in the past year and a growing number reconsidering their operations following the latest budget announcements.
There have been multiple government meetings where the continuation of the 9pc VAT rate was not addressed, leading to frustration among business owners as costs rise, notably due to an increase in the minimum wage and wage inflation linked to housing shortages.
Adrian Cummins shared: Our industry is reading from the news today that we got basically nothing in the budget at a time where we’ve had nearly 700 food led businesses close in the last 12 months. We’ve had three high level meetings with government. At no stage did they say that we were not getting the 9pc VAT rate. And what we’re seeing now is many, many businesses, after listening to the news today, deciding whether they’re going to continue in business over the next number of weeks and months ahead.
And those closure rates will continue. The consequence is that the cost of business at the moment is still going up. The minimum wage increase of 80 cent, there’ll be a knock on effect for that through wage inflation. Our staff must be paid with a shortage of housing in the country, and that’s why wage inflation is going up and up. But on the other side, the government had a prime opportunity here with one stroke of a pen, when there were flush of cash, billions coming in from corporation tax, to look at the hospitality industry, which is one of the most hardest hit in terms of closures, and to bring that good value rate from 13.5pc down to 9pc.
Not alone did they not do that, they created a grant of 4,000 euros that will be given to about 32,000 businesses. When you calculate the minimum wage increase of 80 cents per hour, that will cover the cost of two staff for a business. I can assure you there’s a lot of businesses that aren’t even looking at September, looking at the here and now on how to sustain their business.
We’ve said this umpteen times, that the cost of the business to our industry, because we’re so labour intensive, is out of sync with many, many other European countries. And if they don’t do something on a support package for us, you’ll see more closures. And that’s not good for the local society or tourism industry at large.
There is huge anger out there from the industry. And I think the minister needs to listen to industry, not listen to the officials in Merrion Square. I think there’s a bigger picture here in terms of the closure rates of indigenous Irish businesses. We hear a lot about start-up technology companies. We hear a lot about foreign direct investments and support for them. But where’s the real support for a small indigenous business in this country that you’ll see that they will be helped right through”
The only way they can change their mind is on the finance bill in a number of weeks’ time. And you can imagine now these business owners, when the TDs goes back to their constituencies, what they’re going to be told in their clinics, when they move around their constituency from business owners, that depended on that 9pc being implemented. I think they’re going to get it in the neck in terms of the anger out there across the hospitality sector.
You can suck it up or you can take to the fight. All members are very clear on this, the 9pc is a very clear and ia live issue for us, and come around to election time, whichever manifesto has the 9pc in it, I’m sure our members will vote for that.”
