Neale Richmond (Dublin Rathdown, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am very grateful to the Deputy for raising what is an extremely topical issue. It gives me an opportunity to provide an update and some clarity on what has been done and is being done, and, more importantly, what will be done. Fundamentally, we recognise that small businesses are facing a number of acute challenges, particularly those businesses in the hospitality sector and others to some extent in the retail sector, largely due to rising energy costs, inflation and the fact that we have a very tight labour market.

It would be remiss of me not to mention the very many policy and legislative changes that have come from this House and from this Government, with the full backing of industry representatives, workers groups and all political parties. Indeed, most political parties say that we are not going far enough in the increase of the minimum wage, the increase in paid sick leave, and everything else that goes with that. We are, however, not blind to those costs. We are not just saying that these costs simply have to be borne by businesses.

On the point or the charge from industry that communication is top down, I quite frankly reject that. As the Deputy mentioned, the Minister, Deputy Coveney, and my own team met the RAI yesterday. That meeting did not come out of the blue. We get contact from them on a weekly basis and we have meetings with them every month where we all sit around the table. Between the retail forum and the enterprise and entrepreneurship forum, we speak to business representative groups on a monthly basis. We have all been well flagged on the changes we are moving towards when it comes to a living wage and sick leave. Again, this does not mean we blind to the impact. The Deputy referred to a cost exercise carried out by the Government, which was completed just before Christmas, on quantifying the cumulative costs to businesses by the measures taken through legislation. Of course, that exercise did not happen in isolation. It brought all stakeholders around the table to feed into it. I believe the work has been substantially carried out but I have not yet seen the final report. I do not believe it has reached the Minister yet. All of these things have to be independently verified from an economics point of view. The minute we receive it we will act on its basis. I know the top-line figures, or the explanatory memorandum - even though I would not use that term - is that the measures brought in can be absorbed by the vast majority of businesses. There are, however, particularly acute pressures on the high-labour, low-margin sectors, with particular reference to the hospitality area and certain parts of the retail sector.

I now turn to the increased cost of business scheme that was announced in budget 2024. The scheme is worth €257 million and will benefit businesses that paid up to €30,000 in commercial rates last year. It will give them a cash injection of up to €5,000. While this is not designed to ease all burdens on small business, it is an easy and accessible cash injection that will be very welcome to businesses. It will be paid out during the first quarter this year through the local authorities. We are using the local authorities because it is the easiest way to make a direct payment and it is the easiest way to quantify it directly into an account based on commercial rates paid last year. It is not a commercial rates rebate or anything like that. It is merely using that as a calculating method and a direct payment method into accounts. This will help up to 90% of predominantly small and medium businesses across the country.

The Deputy also raised the issue of tax warehousing. It is a major issue for business at the moment. The Revenue deadline of 1 May is fast approaching like the sword of Damocles dangling over far too many businesses. I assure the Deputy that the Minister for Finance is actively engaging with Revenue on the scheme to see what can be done to help businesses in this regard. A proposal is currently being developed and will be finalised in the next two weeks in respect of flexibility. While we recognise the debts must be paid, we do not want to see businesses come through the pandemic only just to close. A couple of other issues were raised and I will deal with them in my further response.

Neale Richmond (Dublin Rathdown, Fine Gael)
Link to this: Individually | In context | Oireachtas source

A number of weeks ago I was very lucky to meet the proprietors of Wholesome Kitchen in Mullingar when I visited the local enterprise office. Deputy Troy was on paternity leave at that time so we were not able to meet together. I know it is a wonderful business providing good employment. I can tell the Deputy it is good food as well because I was in a position to sample a bit. This is why I want to use it as an example of looking at the various options open to us.

With regard to debt warehousing, I very much hope that, as Deputy Troy has asked, we will get clarity on this in the next fortnight. That is a fair ask. With regard to the increased cost of business scheme, it will be completely paid out by the end of the first quarter of this year. It includes every local authority in the State.

With regard to energy, one of the big issues with TBESS was, as Deputy Troy knows, that unfortunately far too many people did not access it. They did not apply for it because it was deemed too burdensome. This is why we are using a different methodology to get grants through the increased cost of business scheme without the need for filling in too much frameworking.

Industry engagement will be maintained. I fully agree with Deputy Troy that the VAT rate for food-based businesses should be looked at. It was considered when the temporary measure was relieved. It was seen in the overall package that took in the entire hospitality sector, and the cost cumulatively for the economy was approximately €450 million. Sadly, too many businesses were simply doing too well and others were not in a position to be represented. I take Deputy Troy's point on board. It is something we discussed yesterday with the Restaurants Association of Ireland. If I have missed anything, I will come back to the Deputy.

With regard to the staged introduction of measures, to be frank, I am very reluctant to go down that path. The indicative response from the report we commissioned showed the vast majority of businesses can take these changes. It is very important that we increase the minimum wage this year and that we move towards the living wage, which is something we all committed to in the programme for Government, and that, equally, we increase sick pay again next year. In sectors where there is an adverse effect, there are other measures we can look at. We acknowledge that the Government is putting a burden on businesses to make very much needed societal changes. For this reason, the Government needs to step up to the plate, be it through taxation or other measures.