James O'Connor (Cork East, Fianna Fail) | Oireachtas source

I appreciate the opportunity to speak on the Finance Bill 2020. As we all know, it is a very difficult time for businesses across the country. The measures in the Bill are intended to go some way to reinforcing the Government's support for the economy against the challenges of the Covid-19 pandemic and the continuing possibility of a no-deal Brexit, which is a very serious risk for the Cork East constituency I represent.

The new Covid restrictions support scheme and measures such as the reduction in VAT will provide much-needed support to businesses that have been forced to close or significantly reduce trading as a result of the move to level 5 restrictions. Throughout the country businesses, particularly in the hospitality sector, have been feeling the pinch of the Covid-19 pandemic. Cork East is famous and well regarded for its many hotels and tourist attractions. It is also the home for the Irish agrifood industry. They have all taken a serious hit with the Covid pandemic and Brexit. It is important that the Government is taking proactive action to try to help companies and employers as we try to rebuild the economy in the post-Covid era.

I greatly appreciate the difficulties that businesses and individuals face in dealing with Covid-19. In addition to the day-to-day challenges of Covid, they have difficulty with financing and getting accounting practices up-to-date and correct. Many business owners I am engaging with have found it very difficult to find finance to keep their businesses open. It is great that the Government has taken proactive action by helping with community banking and credit unions. In my constituency I know the Minister actively engaged with Midleton Credit Union which is very welcome. I hope he will continue to do that in his ministerial position.

The Covid restrictions support scheme, CRSS, will be very good for businesses and provide them with certainty to allow them to plan accordingly when faced with a greater level of restrictions. Unfortunately, as the Chief Medical Officer told me yesterday when I was questioning him at the Joint Committee on Transport and Communications Networks, we do not know when we will be able to completely move away from restrictions on our everyday life. However, as I have said many times in this House and elsewhere, we need to introduce measures that give people clarity so that they can plan despite the uncertainty faced throughout the Covid-19 pandemic.

Budget 2021 represents the single largest investment in the history of the State. We are making this investment at a time when it is needed most to protect the lives and livelihoods of people and to rise to the challenges of Covid-19. The CRSS scheme will come at a cost to the taxpayer of €80 million a week during the level 5 restrictions. This will be up to €480 million until 1 December. I do not think anybody can come to the House and say the Government is not supporting local businesses and industry on the ground to try to protect jobs. It will provide grants of up €5,000 a week to businesses that have been forced to close and operate with significantly curtailed restrictions. I hope the scheme will bring a level of certainty to the businesses hardest hit by these restrictions, such as the consumer-facing sector of the economy, including retail and hospitality.

I have engaged extensively with the Irish Hotels Federation on the supports hotels need to get through this crisis. Other tax measures included in the scheme, such as the temporary reduction in the VAT rate for the hospitality and tourism sector from 13.5% to 9% with effect from 1 November 2020, are also very welcome. The VAT rate reduction will ensure that when the sector reopens, people will be encouraged to go and use hotel facilities once again, which will be critical for the recovery of that sector.

I have long been of the opinion that hotels are a safe controlled environment for people to engage in socially distanced activities. I hope the reduction in VAT will see a similar boom in tourism as we saw in the early part of the last decade which greatly helped us get out of the last recession. The Departments with responsibility for investing in this area should put in place measures such as the Gathering which we had at the start of the last decade, which was quite an effective measure.

The extension of the employee wage subsidy scheme into 2021 will come as a considerable relief. This will ensure fewer redundancies and lay-offs. It is vital that we maintain the link between employers and employees. This will allow businesses to return quickly when the restrictions are lifted.

The continuation of the commercial rates holiday and tax warehousing also gives employers certainty on cashflow and ensures there is not an increase in additional costs causing debts to grow during lockdown periods. The hospitality sector is a key component of the Irish economy. On several occasions I have outlined to the Dáil how important it is to my constituency. As a collective it is worth up to €7.6 billion and employs over 180,000 people across the country, which is staggering. It shows how important it is to have a multilateral approach to the Government to get this industry on its feet again once we get through the worst of the pandemic. Any support we can put in place to protect such industries is timely and welcome. The leadership the Minister has shown in putting the necessary financial resources in place and taking advantage of the current low interest rate is highly encouraging.

I hope we continue to engage in sustainable investment patterns to ensure we have a robust and future-proofed economy for the challenging times that lie ahead. We must not be afraid to spend now to save in the future.

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