Oireachtas Joint and Select Committees

Wednesday, 18 September 2024

Committee on Budgetary Oversight

Pre-Budget Engagement

3:30 pm

Photo of Jack ChambersJack Chambers (Dublin West, Fianna Fail)
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I thank Deputy Healy-Rae. I will respond to some of the remarks on VAT in particular. I know the importance of hospitality and tourism, in particular for County Kerry and for many businesses across the country.

We absolutely understand the pressure on businesses and small and medium enterprises in the hospitality sector in particular. We have a package of €1.4 billion available and we have said the predominant focus will be on ensuring that, as we have wage growth in the economy, we are not excessively levying workers in the context of what is available around the €1.4 billion. We acknowledge the concerns the Deputy has raised about the hospitality and tourism sector and, as he will know, we reduced the VAT rate from November 2020 to August 2023. The cost of that was €1.3 billion and it was an important and substantial support to a sector that went through a difficult period during Covid. A full-year cost of doing this would be €868 million, and that is challenging in the context of a tax package of €1.4 billion. We are engaging across Government on the wider pressures for businesses and the cost difficulties they are facing.

I will ask the Minister, Deputy Donohoe, to come back on the wider points around public services. We acknowledge the issues and some of the deficits in water infrastructure. That is why one of the priority areas for the AIB share sale will be focused on water infrastructure, housing and energy. I acknowledge some of the wider matters the Deputy has raised in the context of a very difficult case relating to disability services and other areas of infrastructural priority which the Minister, Deputy Donohoe, leads on in a context of the national development plan. Perhaps he could come back to the Deputy on the bullet train proposal as well.