President’s Report – August 2020
The past month has been a disappointing blow for us, we had been promised a ‘package of significant measure’ in the July Stimulus that would be a life line of support for our sector. Instead we have been given scraps. Scraps that have numerous conditions in order to qualify. As one restaurant mentioned on its sandwich board; “remember when the Titanic was sinking and the band kept playing…. Well, we’re the band…..” It also reminds me of the titanic and depending on what ticket you have you may get a life raft. As I listened to our leaders deliver the July stimulus I was shocked to see the tourism rate of VAT stay at 13.5% considering the negative impact the rise of the VAT Rate had on the sector last year when it came up from 9%.
Our UK Neighbours have had their Tourism and Hospitality VAT rate reduced to 5% for 6 months and so it seemed likely that the pragmatic approach would be to reduce our VAT rate to ensure a level playing field between the border counties and Northern Ireland. We along with other trade representative bodies sought a Tourism & Hospitality VAT rate of 5% and the on-trade sale of Alcohol to be aligned with this rate. Ireland has the second highest rate of VAT for Hospitality in Europe and this must reduce in the forthcoming Budget if we as an industry have a fighting chance to survive the economic impact of COVID and also BREXIT.
The Stay and Spend Scheme is not fit for purpose, I cannot understand why the voucher cannot be made available immediately. Children are back to School in September when this scheme begins and the voucher needs to be more inclusive to the public instead of finding ways for families not to make use of the scheme. I feel that this was a deliberate move and it needs to be amended. The extended restart grant of 15k will be a boost but it is a very short term win for a sector that requires a more consistent stream of support for a more significant time frame. The wage subsidy reduced to a flat rate of €203 until March is not sufficient, 42% is too much of a drop. We need liquidity and cash flow to ensure stability.
Our only hope is that the collateral damage between now and the October Budget is minimal and by then this government will come to its senses like it did by including Proprietary Directors in the new Employment Wage Subsidy Scheme. Minister Donohoe made a quick turnaround which is the kind of leadership I would love to see more often…. a government that reacts and responds when it makes mistakes.
An extended Rates waiver until September is laughable considering the guidelines we are still working on which restricts us from operating at any viable capacity for our restaurants. March 2021 is the minimum amount of time required until businesses start paying rates again. Our city centres are decimated and the grim reality is that unless there is a solution of burden sharing of commercial rents many businesses will close. As mentioned before, government intervention is required here and it is essential that it happens very fast. Hardworking business owners will have no option but to hand the keys back to landlords if this is not addressed immediately.
It is very disheartening to be writing a newsletter of such negativity at a time of year our businesses should be thriving. These times are certainly unprecedented and I understand it is not the fault of the government that a pandemic came along. I also understand that it is times like this that we need leadership. The Westcourt Hotel in Drogheda has closed its doors after 268 yrs of trading. It was the heartbeat of the town and it is not coincidental that it closed after the July Stimulus was announced. I think that many businesses will close because of the lack of unconditional supports that have come our way and it is my hope that our members will put pen to paper and let your local TDs know what is happening on the ground.
I wish you all the very best and look forward to September.
Best Wishes, Mark McGowan -President
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