Catherine Connolly (Galway West, Independent) | Oireachtas source

I welcome the opportunity to contribute to this debate. I thank Deputy Fitzmaurice and his office staff not just for their work on the motion but for giving us the opportunity to put a spotlight on this area. I appreciate and acknowledge all the help that is being given to the different sectors. However, since I was elected, I have looked for long-term, sustainable solutions. The lack of such solutions is the cause of my difficulty with the budget every year. This budget certainly exceeded all our expectations in terms of giving out money without a long-term, sustainable plan in many areas.

Outside of housing, health and the war in Palestine, we receive the most representations from people regarding the issue we are discussing. Deputy Fitzmaurice has set out a very detailed motion. The Government has put forward an amendment, as has the Labour Party. There has been flip-flopping on this issue for a very long time. The approach has been up and down. In July 2011, which is a long time ago, a 9% VAT rate was introduced to support and boost employment in a range of areas. It worked, with employment figures increasing. In budget 2019, the VAT rate was increased to 13.5% for tourism activities, with effect from 2019. That was a flip-flop. Moving forward to budget 2021, VAT was reduced again to 9% to help businesses during the Covid period. Again, the Government was able to change the rate when it decided it was right to do so. That reduced rate ended in September 2023, with a 50% increase in the rate for the hospitality sector.

The motion calls for a 9% VAT rate on food sales. I am no expert in the area of finance. However, we all have experience in our local areas of businesses going bust on a daily basis. There is a constant mantra from the Government that small and medium-sized businesses are the backbone of our society. I agree with that but the mantra has become a bit rhetorical. Small and medium-sized businesses are indeed the backbone of our society but they are not getting the practical help they need for the transformative action that is necessary because of climate change and the public health requirements arising from the next pandemic we will face. All the actions from the Government, with the help of Members on this side of the House, should be to bring forward transformative action. That has not happened. It has not happened in regard to public health and an analysis of how businesses will cope with another pandemic while ensuring public safety. All of that has to be taken into account. Another consideration is how businesses are coping with increased costs, including the increases in wages. Those wage increases are absolutely essential, as the Minister of State acknowledged.

We all use restaurants. On a Friday, I go out with my staff to a small restaurant. Tremendous work is being done by such businesses but they are all struggling with rates and rents. In addition to the other measures, we need an analysis of how we can make small businesses viable in the long term. The rates system absolutely mitigates against that viability. We receive representations from business owners regarding the enormous rates bills they are charged every year. This comes back to the bigger issue that local authorities are utterly reliant on property taxes. They are going up in Galway city, where people are struggling. Rates are a problem because the local authorities are not being funded properly. Both officials and councillors in Galway County Council have had a lot of meetings with us TDs, including Deputy Fitzmaurice, to discuss the underfunding of the county council. Recently, the city council members said the message from management was that the council could not provide the services it should be providing without an increase in property taxes and so on.

I fully support this motion. I reiterate the importance to an area of a small local restaurant. I think in particular of one in Connemara. I am not singling out anyone except an ceann sin i gcroílár na Gaeltachta, atá luaite cheana agam, is í sin, POTA in Indreabhán. Scríobh an bhialann sin litir chugainn ag cur in iúl na ndeacrachtaí ar an dtalamh. Is gnó é seo a bhfuil an cuma air go bhfuil sé ag déanamh dul chun cinn an t-am uilig. Tá an bhialann bheag sin ag tabhairt cuid mhaith buntáistí don cheantar. Faigheann sí an bia amh cosúil leis an gcáisc, na huibheacha agus na hábhair amha uilig ó dhaoine sa cheantar. Tá an bhialann bheag seo ag coinneáil na ndaoine sin ar an dtalamh. Tá sí ag éascú dóibh maireachtáil sa Ghaeltacht. Tá réimse leathan buntáistí ag gabháil le bialann nó gnó beag mar sin i gcroílár na Gaeltachta. Ní féidir glacadh go bhfuil an bhialann sin i gcónaí ag cur in iúl dúinn cé chomh deacair is atá sé maireachtáil leis an VAT agus leis na táillí eile. Cé gur ag dul timpeall i gciorcal atá mé, tá mé ag rá go bhfuil an gá le VAT a laghdú ar cheann de na rudaí atá tábhachtach, ach tá rud eile ag teastáil freisin, is é sin, fís, plean agus straitéis do na ceantair thuaite agus na ceantair Ghaeltachta ionas go gcuireann muid in iúl go bhfuil muid i ndáiríre faoi rud a dhéanamh de réir ár mbriathair.

This motion calling for a reduction in the VAT rate is just one element that is needed in an overall plan, strategy and vision for genuine regional development, balanced regional development and balanced city and rural development. I specifically mentioned one restaurant in Indreabhán, which I invite everyone to visit. This debate puts the spotlight on the importance of small businesses like that for an area in terms of entirely sourcing their suppliers locally, thereby enabling people to live a sustainable life in the Gaeltacht as well as giving employment. It is a pity that this is not the start of a proper conversation as to what we need to do to make sustainable work for people. Without that, we are paying lip service to the issues.

After this debate, I hope to catch the tail end of the presentation from representatives of the regional authorities, who are constantly highlighting the imbalance between the regions, particularly the north west. My colleague tells me County Galway is doing better but that is not quite right; parts of Galway are doing better. There is an imbalance in the region and it has been downgraded by Europe in recent years. I would love to support the Government's amendment but I absolutely cannot do so. We need a different vision and emphasis. This is just one of the steps that is needed.

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