July stimulus is cold comfort to thousands of Restaurant and Hospitality Businesses across the country - RAI
Key Elements of July Stimulus Package do not support job retention in restaurant sector
Adrian Cummins, CEO of the Restaurants Association of Ireland, said:
“By not decreasing the Tourism and Hospitality VAT rate today in line with our EU counterparts and closest neighbour today’s July Stimulus has put a nail in the coffin for border Restaurant & Hospitality businesses competing with 5% rate in Northern Ireland
We are questioning the decision not to include a grants package for Tourism and Hospitality in today’s July Stimulus. We appeal to Government to support businesses to reopen, to retain employees and keep the economy going!
To ignore immediate legislative issues such as; insurance reform and commercial leases until October’s Budget would result in the demise of a significant number of businesses and immediate job losses.
I am appealing to the Government to rethink this decision and to support independent tourism and hospitality businesses around the country with a targeted grants package!”
The Restaurants Association of Ireland have expressed their concern that the lack of legislative issues addressed in the July Stimulus package such as insurance reform and commercial leases could prove detrimental to the industry. While the extension of the Temporary Wage Subsidy Scheme and inclusion of seasonal and new businesses, an additional restart grant, and the decrease in alcohol VAT rate to 21% announced in the July Stimulus package today are welcomed, there are concerns that without further supports implemented, many local businesses, the backbone of Irish communities, will close permanently.
If the government fails to act, this lack of support for Irish restaurants could cost the state €2.8 billion over the next 24-month post-COVID19 period, according to Economist Jim Power’s Report “Restaurant Recovery Plan” presented to all Government Departments and TD’s in June. This report by Jim Power Economics also states that there are 100,000 jobs at risk in the sector, and that “Without aggressive and effective official policy supports, many of these businesses will be forced into bankruptcy.”
Economist Jim Power warned Government as early as April that the costs of not Supporting the Restaurant Sector would be significant. If 100,000 workers were to remain unemployed for a full year it would costs the exchequer
By not supporting businesses in the July Stimulus today Government has passed on significant costs to the exchequer that could have been avoided.