Gerald Nash (Louth, Labour) | Oireachtas source

I agree and in that spirit I will limit my remarks to my amendment on the 9% VAT rate on the hospitality sector, which is being extended yet again. This VAT relief was introduced initially for good reason in 2011, when unemployment in this country was in danger of heading towards 20%. It was a very important measure introduced in 2011 to try to encourage a sector that we believed could recover quite quickly from the economic difficulties we were experiencing. The sector added jobs very quickly with the support of this innovation. Of course, as we know, the 9% VAT rate has continued to be extended beyond the period when it was of any real utility. We know that in recent years officials in the Department of Finance undertook research in respect of the efficacy of this particular very expensive VAT reduction applicable to the sector. They found that in latter years the measure was considered to be a deadweight measure. In other words, it was using a significant amount of taxpayers' money to support activity that would have taken place in any event.

In recent days we have all listened to independent economists who have no particular political perspective and have looked at this from an academic and functional perspective. They have stated there is no longer an economic argument for the extension of this particular VAT rate reduction. We know to our cost in this country that the hospitality sector broadly in general terms, and not every hospitality sector employer, is the lowest-paid economic sector in the country.

It is responsible for a very significant amount of employment but it is a sector that is, as I have said before and will say again, addicted to low pay, long hours and precarious work.

A Fáilte Ireland survey in 2021 made it very clear that over half of all workers earned between €10 and €12 an hour, which is below what we now consider to be a living wage in terms of the hourly rate. The Unite trade union undertook research in 2021 and 77% of respondents indicated that low pay was the dominant and most significant issue in that industry. In fact, in November 2022, the Oireachtas Joint Committee on Tourism, Culture, Arts, Sport and Media in its report recommended what I am recommending this evening, namely, that the joint labour committee that has been legislated for, and that has been in place since the Industrial Relations (Amendment) Act 2012, starts functioning.

I signed two employment regulation orders in 2015 under the restructured, reconfigured and constitutionally robust joint labour committee system. There are two in operation at present, one for the contract cleaning sector and one for the security sector, and they are operating very well. In fact, there are three in operation at the moment, and the third is in the childcare sector. I am sure the Minister, Deputy McGrath, agreed when the Minister, Deputy O'Gorman, brought the memo to the Cabinet suggesting that a joint labour committee would be set up in the early years sector to improve pay, terms and conditions, and when he decided, with Government approval, that he was going to invest several hundred million euro in the sector to bring down costs for families, but also to improve the pay, terms and conditions of workers in a sector that was finding it very difficult to attract, recruit and retain staff, and where low pay was a very real issue.

The same issue exists in the hospitality sector but, year after year, we have decided to transfer hundreds of millions of euro into the sector without asking for anything at all in return. That is not good public policy. Good public policy would insist that we use taxpayers' money to drive better economic and social outcomes for everyone. I read with interest earlier in the Irish Examiner online that the Tánaiste, when pressed, said that people who are dining out or staying in hotels should be able to get better value. He was saying this in the context of the €300 million VAT extension, and I agree with him. However, with regard to the workers in the sector - those low-paid workers who are delivering the service, day in and day out, often in difficult circumstances and on precarious contracts, with no Sunday premium and some working for minimum wage or just above it - I did not read of him saying that he wanted to see pay and terms and conditions in the sector improve.

The Labour Party is requesting, through this amendment, that the current situation as it applies to the sector, the 9% VAT rate, be extended until 30 April 2023 and if, on 30 April 2023, a joint labour committee for the tourism and hospitality sector stands established, that it be further extended until 31 August 2023. I believe that is a reasonable request. Many billions of euro have been used to support the hospitality sector in recent years, yet pay and terms and conditions are still poor and precarious. In my experience, very few people can make a good living and expect to have a decent quality of life while working those precarious hours in a sector that, as I said, has become addicted to low pay.

I appeal to the Minister to review the position and to take some leadership from the example shown by the Minister, Deputy O’Gorman. When he transferred funding from the State to private providers in the early years sector, he demanded that contingent on this would be compliance with a joint labour committee. The best way to organise workers and the best way to customise solutions, if I can describe it as such, in an economic sector is through collective bargaining. We have a sectoral bargaining system in place. It was the will of this House in 2012 that there should be a joint labour committee and, ultimately, an employment regulation order for the hospitality sector. It has happened in the contract cleaning and security sectors, and it is now happening, thanks to the Government and the Minister, Deputy O'Gorman, in the early years sector because significant moneys were transferred and it was made contingent on the operation of a joint labour committee. I ask the Minister, Deputy McGrath, to review his own position on that; to be consistent with his Government colleague, the Minister, Deputy O'Gorman; and to accept the Labour Party amendment, which I will be happy to move when it is appropriate.

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