President’s Report February 2022
Welcome to my Presidents report for February 2022. I am delighted to be writing in a somewhat un-restricted trading environment. It has been a long road and our newfound freedom feels quite fragile as it has been taken from us on so many occasions throughout the pandemic, but I am quite confident that restrictions are now fully behind us, and we can begin to dust off and continue what will be a long and arduous road of recovery. There certainly is a feeling of positivity in the air but we are all aware of the challenges that lay ahead. Debt warehousing has been extended to the end of April but bear in mind that the 3% rate of interest will be in place in January 2023. I am concerned for businesses that will really feel financial difficulties when the VAT rate jumps by 4.5% at the end of August. The cost of living has sparked a higher wage demand from our workforce.
The cost of doing business is higher than ever before. Our supply chain, utilities and labour costs are continuously rising to unsustainable levels. I try to be optimistic, but I must be realistic, and it is daunting to think of how on earth we will be able to keep up. There are initiatives put in place to deal with struggling businesses such as (SCARP) Small Company Administrative Rescue Process which is designed for struggling small and micro companies. It has the same fundamentals but more cost effective than the examinership process. I would rather see alternative measures put in place that would avoid these scenarios. If there was a system in place such as a write down or an amnesty of warehoused tax debt which has since been shot down by Minister Donohoe. Understandably, many businesses have paid their tax liabilities throughout the pandemic and in the interest of fairness this would not be a runner. Could it be possible to give a write down to those struggling and a possible bonus to those that have paid? The 9% VAT also needs to be revisited before it rises to 13.5% at the end of August.
Last month our Chief Executive Adrian Cummins met with Tánaiste Leo Varadkar and discussed a range of issues facing our sector. Our priorities were to discuss all the big issues such as staff shortages, work permits and visas. An Tánaiste had agreed that the 19 week wait for a work permit was totally unacceptable and will do all he can to address the issue. We addressed the exclusion of daytime hospitality from the extension of supports and have made representations to Minister Donohoe and Martin in the regard also on several occasions since the announcement. Warehousing of debt, 9% VAT and alcohol licencing reform were all discussed at length with An Tánaiste and feed back was very positive. Our Association also re-iterated the importance in reviewing Failte Irelands structure, we have been told in the past that the restaurant sector is not in Failte Irelands remit! If our industry is not under Failte Irelands remit, then what or whose wing do we fall under? We are an industry that contributed €15.3 billion to the national GDP in 2019, employing 250k people. We need better representation in the form of a state body and stakeholders such as the Restaurants Association of Ireland should have a seat at the table to ensure there is continuous engagement as to our sectors needs and requirements.
The recently published Tip Bill provides more protection to employees as it prohibits the use of gratuities to make up contractual wages. We welcome this Bill as it gives clarity and transparency as to how and where gratuities go in all industries. The Restaurant Association welcomes this move and any legislation that gives more protection to our much-valued workforce. The Bill will continue to pass through the Houses of the Oireachtas and we will update members on its progress and enactment.
Valentine’s Day is only a week away and the fact it lands on a Monday there is an opportunity to celebrate the occasion for a full weekend. I hope you will be kept very busy and wish you the very best for the coming weeks ahead. I look forward to chatting to you again in March.
Mark McGowan – President
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