Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I hear the concern regarding the hospitality and food sector. I have seen that for myself. We have seen some quite high-profile cafés and restaurants going out of business. Let me set the context. It is important to say this. Considerably more businesses are being set up than are closing down. Last year, five times as many businesses were set up as were lost. That being said, in recent months the Department has looked at the combined cost pressures of policy changes and how they apply to different sectors in the Irish economy. For some sectors they have had virtually no impact on the cost base - it is 1% or 2%. In other sectors it is much higher with a cost increase of 12% or 13%. It is no surprise to hear that food retail is in that space.

The question now is how we can respond to that in a way that is appropriate, does not create demands in other sectors of the economy and does not require us to have a mini budget in the middle of the year. We only had a budget a few months ago and it was a good one. We are working on the appropriate policy response in some of these areas. As I said, the Minister, Deputy Michael McGrath, has already responded in a very helpful way with the change to warehoused tax debt providing significantly more flexibility and reduced cost in how that is managed for businesses. We are now looking at what else we can do on top of that. I think it is important not to create an expectation here that we can have significant tax and expenditure decisions between budgets. That is a difficult ask.

Regarding the lower VAT rate of 9% for hospitality, an argument was made to separate the treatment of bedrooms in hotels, for example, from the sale of food in restaurants and cafés. That proposal proved to be very complex to implement and so we decided not to go with it in the budget last year and those complexities are still there. It is up to Government to look at all of these things in the round. We should not create unrealistic expectations but at the same time we need to recognise that there is a problem. This is a pro-enterprise, pro-business Government. We will look at this with an open mind to see what more we can do to help businesses that are under pressure.

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