Olivia Mitchell (Dublin South, Fine Gael)

I am pleased to support this motion, which goes to the heart of our economic problems. There is no doubt that there has been a reduction worldwide in the overall amount of goods and services traded. Our particular difficulty is that the amount of Irish goods and services being sold has reduced by more than the international average. This is not just because our financial crisis is more extreme than elsewhere but because we have become grossly uncompetitive, declining from fifth in the world nine years ago to 25th in recent months. The reality is that our economy cannot and will not recover if we are unable to sell our goods and services, and we will not be able to do so if our prices are higher than those of our competitors. It is a simple equation. My colleague, Deputy Bruton, has been saying for months that we cannot work our way out of the current budgetary crisis by increasing taxes; we must do it by reducing costs.

All taxes, charges, levies, licence fees, rates and duties, no matter who initially bears their cost, eventually filter down to the consumer, whether domestic or foreign. In other words, it is ultimately the consumer who must pay the extra charge. It is up to central Government, Government agents and local authorities to reduce their own costs in the same manner as businesses have been required to do. Moreover, it is not merely a question of charges. The regulatory and administrative burden on every business, large and small, private and semi-State, has increased substantially in recent years. I refer to costs arising from the accretion of legislation in recent years, including regulations relating to equal status obligations, freedom of information, health and safety, data control, accounting requirements, payroll costs and so on. Even apparently minor issues have an impact, such as the cost of administering the travel tax or the burden imposed on local authorities in implementing the pension and income levies. All these initiatives may be necessary and worthy in their own right, but the Government must be conscious that they increase the cost to every business and consequently the cost of every service and product.

We must at least ensure there is some rationalisation of administration in order to reduce costs. In the restaurant industry in Dublin, for example, there is a ridiculous arrangement whereby fat traps must be inspected by Dublin City Council. Instead of arranging for this to be done by its environmental health officers, who call to every restaurant in the city several times a year in any case, the council has contracted a private firm to carry out these inspections. It is not a case of collecting the fat but of inspecting it. It goes without saying that the associated cost is imposed on businesses, amounting to an additional tax of €600 or €700 on top of the rates already being paid to the city council. The issue of rates is of particular concern for the tourist industry. I am aware of one hotel whose owner is paying rates in the order of €10,000 per week. It is totally unsustainable to have to pay that amount before even selling a sandwich. It is important that the revaluation of hotels be done quickly, but it currently seems to be taking forever. Another issue is that revaluations are based on size rather than earning power, but empty bedrooms do not earn anything.

In terms of the Government shooting itself in the foot when it comes to the tourism industry, the travel tax is the Daddy of them all. Tourism supports some 250,000 jobs in the State and for an island country there is nothing more important than access. Trade from our largest market, Britain, is falling dramatically largely as a result of this tax. The trade between Ireland and Britain is hugely price sensitive and in some cases, the tax is greater than the fare. It is a no brainer that something be done to address this. Calls to that effect have come from all involved in the industry and all of the airlines. The Government is sleepwalking into a situation where indigenous airlines are increasingly taking aeroplanes out of Ireland in order to serve more competitive locations. We will never get those services back. No matter what we have to offer, no matter how good our hotels or how attractive our tourism product, it is of little use if people find it too difficult or expensive to get here. In that case, we are simply pouring away all the investment that has been made in recent years.

The 20% increase in wine excise duty in the last budget slipped under the radar because it did not affect everybody. However, such a substantial increase in the cost of wine has led to redundancies in the trade and the closure of many wine businesses. Worst of all, the impact extends into the broader economy because alcohol is the major driver of cross-Border shopping. People travel to the North to purchase wine and end up buying far more than that. Money is being driven out of the country as a direct result of Government action, with inevitable job losses.

Travel agents are also suffering as a consequence of regulatory requirements and have become something of a disappearing breed. The onerous 4% bonding charge puts them at a disadvantage relative to on-line travel websites. That charge made sense when most people booked their holiday through an agent rather than on-line, but it now amounts to inequitable treatment. This must be revisited in order to reduce costs and save jobs.

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