Matt Shanahan (Waterford, Independent) | Oireachtas source

I will speak and then raise some issues and ask the Minister of State to respond at the finish. On behalf of the Regional Group, I wish to continue to extend sincere condolences to the families and relatives of those recently bereaved because of Covid-19. We offer solidarity for those in recovery. I congratulate our wonderful healthcare workers for their efforts. Our continuing debt of gratitude to them can never be overstated.

2020 is presenting the most significant of challenges to our national economy. Nowhere is this more evident than in our tourism and hospitality industries. They largely comprise privately-owned small and medium-sized operators. They have provided our national and rural economies with a sustainable economic dividend for many years. Tourism has helped transform the image of Ireland, cementing our reputation for business and social interaction. A wide range of enterprises draw business from our tourism sector, including retailers, pubs, restaurants, entertainment venues and public transport operators. The tourism and hospitality sectors have seen steady growth year-on-year shaking off the effects of the financial crash. Dublin, the south west and the north east generate the most visitor numbers but destination events and activities in the regions have helped to create a pull factor to garner revenue share as well.

In 2019, overseas tourist visitor numbers to Ireland topped 11.2 million. More than 5.6 million of these visitors came on an extended holiday. These visitor numbers support much of Ireland's commercial tourism offering, including its 7,200 pubs, 3,100 off-licences, 2,400 restaurants and 983 hotels. Employment in the sector pre-Covid-19 was estimated at 260,000 people. It was generating annual revenues of €7.5 billion with net tax receipts to the Exchequer of €1.9 billion. Nothing, however, could prepare the sector for the impact of coronavirus, which has devastated the medium-term outlook. These impacts now represent a mirror reflecting the challenges facing the entire SME sector in Ireland. The tourism and hospitality industries have been among the first to close, thereby cutting off all available revenue streams. When green-lighted to open, international visitors will be absent because of travel safety and financial concerns impacting on their countries.

The development of a vaccine, triggering a restoration of financial and business confidence in customer countries and here at home, appears some way off. The only clear pathway to sectoral recovery in Ireland is domestic market activity. This will be hampered with the restrictions of Covid-19 management. Social distancing requirements, for example, will reduce customer numbers, thereby reducing the consequent revenue return available. Without a seismic change in current national financial planning regarding the overall SME sector, Ireland Inc. is heading for an employment meltdown and consequent economic damage that could last for a decade or longer. Solutions are being offered for the tourism and hospitality sector, where 175,000 workers have now lost their jobs. I ask the Minister of State to consider the following suggestions proposed by industry experts with whom I have recently consulted. They highlight ten key areas for immediate strategic review.

The sector needs a task force made up of trade representatives from hotels, restaurants, airlines and State bodies. I welcome the Minister of State's commitment to that. I hope to see it expedited as soon as possible. There should be a reduction in the VAT rate to 0% for tourism and hospitality for the period of the crisis and for 12 months thereafter, then reverting to 9% for a period of five years. There should be rent legislation to protect commercial leaseholders, a rents incentive package and a scheme such as that France has implemented, namely, the 60-20-20 scheme, whereby Government supplements rent by 60%, the landlord reduces rent by 20% and the commercial tenant pays 20% for 12 months of the crisis. Insurance reform is required. Payouts under business interruption and notifiable disease clauses are required. There should be forbearance in policies for the period of closure and no suspension of cover while businesses are closed. Wage supports should continue for restaurants and the hospitality sector until a vaccine is found. There should be support for people over the age of 66 and seasonal workers in the wage subsidy schemes. There should be a liquidity grant package through the Department of Business, Enterprise and Innovation to cover outgoings in the first six months following the return of normal trading. There should also be a commercial rates write-off for restaurants and the hospitality sector for the full crisis period until a vaccine is found. I welcome the three-month deferment but it is, unfortunately, not enough. There should be a ban on utility providers cutting off services and demanding payments when businesses are closed and a review of standing charges for the closure periods. In addition, our bankers need to provide a suspension of banking fees for the hospitality sector. Interest on loans should be at the ECB interest rates, and a moratorium on existing loan repayments should be provided. Finally, there should be a waiver of licences for outdoor tables and chairs for one year in order to enable businesses to reopen and adapt to social distancing by using outdoor spaces. If I may add a suggestion of my own, I would like to see the Minister of State's Department lead on a "buy local, spend local" campaign as soon as possible to support local indigenous businesses.

The financial packages at present under consideration do not meet the needs of the SME sector or the tourism and hospitality sector. These businesses need money injected by way of grant support to compensate them for acting in the national interest. They cannot sustain more debt. They need deferments and incentives such as those I have mentioned to allow them repair their businesses and adapt to the new commercial realities of life after Covid-19 but before any vaccine becomes available.

We socialised an extraneous debt in 2011 for our financial sector. We took that decision not to save lives but to prevent financial contagion to the wider economy. We now face a similar dilemma but for very different reasons. To preserve life we place the economy into an induced coma. Having done so we must now resuscitate it and support it in every way to see it fully recover. The tourism and hospitality sector is a mirror that reflects the wider difficulties in our SME sector, which employs 70% of our present working population. We need to make dramatic financial provisions in order to resuscitate our economy successfully. Government mobilised a war effort and used all tools at its disposal to fight Covid-19. It must now demonstrate the same singular purpose and vision to support financially our tourism and SME sectors to secure an enduring, sustainable economic revival.

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