President’s Report – May 2020
As we enter the 8th week of lock down it is fair to say that we as a nation have done a remarkable job in flattening the curve. An Taoiseach’s announcements on Friday has given clarity as to when our industry will reopen and when our recovery will begin which is the 29th of June. It is difficult to envisage what a reopened restaurant sector will look like and what guidelines will be in place to ensure a safe environment for our customers and staff while ensuring viable businesses. How do we re-establish ourselves and convince the population to come back to restaurants? We will need to be innovative and entrepreneurial. If I have learned anything in my first year in office, it is how resilient a force we are. We are dynamic and extremely capable. We can and we will re-invent ourselves, but only if we are backed by government.
In order to ensure our restaurants are viable our running costs must coincide with our turnover. The wage subsidy scheme is an excellent move by government and one that has enabled businesses to keep a link with their employees and in many cases re open in a limited capacity in the form of a take away and delivery service. The Restaurant Association has devised its recovery plan and presented to government last week. The 9 point plan is what is required to support and ensure the recovery of our sector.
To rebuild Ireland Inc. and to recreate a sturdy economy the tourism sector is the entrance into many other sectors such as retail, beauty, transport and agriculture. Our minimum requirements as an industry is a 0% rate of Vat until our population has full unconditional access to a vaccine. This will be an expense to the exchequer but a worthwhile move, SMEs are the backbone of the economy and it will be the small guys that are going to pull us out of this mess. Local authority rates have always been a hardship on business and although they have been waived until the end of June, the date will need to be extended until business returns to normal. The state has made a commitment to local authorities to make up the shortfall to ensure continuity of public services and so there is no reason why this cannot continue.
A €10k grant has been announced for SME, full details are yet to be disclosed, it seems that it is a rebate on 2019 rates to a maximum of €10,000 which is a pinch of salt in comparison to the funds needed to save businesses. Our banks are offering loans to SMEs which are deemed low interest rates. In my view way too expensive in the current climate and most options I have seen are too short a term. Micro finance have offered 0% loans to a maximum of €50k for small business which is welcomed and the banks need to come up with similar terms on larger loans. The moratorium for any loan should be a minimum of 12 months and when we are out the other side of this crisis repayments may kick in. A €2 Billion credit guarantee scheme has been put in place and this needs to be executed in the right way. Credit needs to be more accessible and swifter.
We are pursuing many other supports from government. Leaseholders are under immense pressure from landlords and a scheme similar to the French initiative where by the government pay 60% the tenant 20% and the landlord 20%. There are many arguments as to where the government will come up with these funds. The ECB are providing funds at 0% interest and our government has access to this capital. One way of relieving pressure off government is if our insurance companies start to play their part, it is time they step up and bring something to the table. Rebates are the minimum expectation and we are expecting Insurance companies to step up very soon.
Next month, I am hoping we will have a plan on the guidelines for operating a restaurant business under Covid 19 restrictions and we can begin our recovery, hopefully that recovery will be with the full support of Government to enable us in re establishing Ireland as one of the best food destinations in the world. Local Authorities around the country will need to have their pro-business caps on to ensure we can start paying rates again. Abolishing parking fees will bring people into towns. Enabling restaurants, pubs and gastro pubs to have outdoor seating without taxes or fees will help to get the wheels of local economies turning again. Relaxed rules on outdoor events and enabling businesspeople to pursue their goals in creating markets and festivals are a must. #staycation will not work for the entire industry and many will rely on our local customers to keep our businesses afloat. We will need new and innovative approaches by all in our communities to make our new normal a success.
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