Dáil debates

Wednesday, 3 February 2021

Emergency Measures in the Public Interest (Covid-19) Act 2020: Motion


4:55 pm

Photo of Matt ShanahanMatt Shanahan (Waterford, Independent) | Oireachtas source

The Regional Group certainly supports the extension of the scheme because we see it is as very important in providing liquidity and in softening costs on business owners. As a payroll support, we also see it as helping to keep up payments on social welfare contributions, which are very important for those looking at pension entitlements later in life.

On balance, the scheme is relatively straightforward. This seems to be the reaction of many businesses, although I would point out that Revenue can appear to be overbearing in both the process and the criteria. We have already heard about some of the people who have applied under the scheme. I wish to speak about a company which was 0.1% outside of the threshold, having claimed it. Revenue came back to look for the return of the full amount of moneys that had been subsidised. That is not a way to treat businesses which are quite challenged at the moment. They would not be looking for these schemes if they did not have liquidity and business problems. I ask that Revenue might take a little bit more of a sympathetic approach to people in that situation.

The EWSS is a support to payroll but it does not support other business costs. These have been spoken about previously. One cannot talk about softening payroll costs while ignoring all of the other costs that are building, particularly for businesses that are shut down at the present time. I am thinking of people who are still receiving bills for their rent, for leasing, for utilities and for insurance.

This is another issue which the Government must do more about. We may need to look at the provision of some supports, if it is a case that we cannot soften the situation to some degree. Many people will be coming back to a reduced turnover and may be applying to this scheme, while others may be beneficiaries of the CRSS. Those people will have significant liabilities to face when they return to full business mode. It will be then that the full weight of State supports will be needed to endeavour to keep as many businesses viable and maintain as many people in employment as possible. The scheme has also allowed employers to retain talent. It should not be forgotten that in many cases a good deal of time is spent in training new employees for a specific business after they have been taken on. Having this scheme in place has been very helpful, therefore, in securing and retaining talent until the business environment improves.

The Minister has left the Chamber, but the trajectory of business returns will not be a 90% straight up line. After this experience, many businesses are going to hiccup their way along. Potentially, they will be outside in respect of getting advanced turnover and unable to avail of support from the EWSS. Turnover, however, does not deliver profit. It is margin on turnover which delivers profit. This is again going to become very apparent in the next six to 12 months as businesses look to see if they are viable post-Covid-19 and to see what the demand curve will be like.

There is also going to be a weaning-off period. Once we give supports to businesses, especially in these straitened times, we cannot just come along and decide that what may be significant business supports are going to be cut in a certain month. There must be a period of downsizing over several months. Businesses also need transparency regarding the intentions of the Government and the Revenue Commissioners in this regard. I request that the Minister examine some form of graduated reduction in this context to secure business viability. Some other supports that will be needed, which have already been mentioned, include developments in respect of examinership light and the extension of the CRSS. Many service companies are not receiving CRSS support now, which I reiterate is vital, and yet those companies have these ongoing costs in respect of leasing, rent, etc. We must look more closely at supports in this area.

One other aspect concerning these schemes involves the warehousing of debts. Many companies availing of the EWSS may also have taken advantage of the ability to warehouse debt for value added tax, VAT. It is interesting, however, that one of the taxes which cannot be warehoused is corporation tax. Perhaps the Minister or someone in his Department could advise people about why that is the case. In addition, a year after warehousing debt, if it is necessary to arrive at a payment plan with the Revenue Commissioners, the rate of interest that will be applied is about 8% a year. It is penal to apply that rate of interest at a time when the State can borrow at negative interest rates. The Minister has some touching up to do but, on balance, this scheme is valuable and it is working well. We in the Regional Group are delighted to see it extended. We hope it will be extended for some time and that it will be downsized gradually as it ends.


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