Victor Boyhan (Independent) | Oireachtas source

I welcome the Minister and the debate on this motion. If one looks at the motion itself, it is broken down into six paragraphs. We talked about recognising the economic importance of tourism. I have no difficulty with that. We are recognising the significant achievements in increasing the tourism numbers into Ireland given the difficulties. I have no difficulty with that. It goes on.

I have a problem with the sixth point, which "calls on the Government to retain the 9% VAT rate on a multi-annual basis which will allow and encourage the tourism industry to plan ambitiously for the future". Let us look at the history of when this was introduced. Tourism was on the ground and there were problems. I do not know if anyone tuned in, but I want to single out a few issues. I note the Irish Congress of Trade Unions, ICTU, has sent a letter to all Senators and indeed, I think, Members of Dáil Éireann too. It set out some reasons it would have concerns about the 9% rate.

There was a programme this week on RTE radio which highlighted some serious issues of abuse of people and workers in the hospitality sector, who have no contract hours and are below the minimum wage. This is widespread. I have come across it myself in hotels in south County Dublin. I went to the trouble of checking one yesterday. The workers feel intimidated. If they raise concerns about issues of pay or conditions of employment, they are frozen out with fewer hours that are not sustainable for them to live. People who may not have their papers in order are being used. This is also common in the sector. That is the reality. There is very significant abuse of workers in the hospitality sector, particularly at certain grades. That concerns me. Senator Kieran O'Donnell put his finger on it when he asked how we can be guaranteed that the benefits of this cut in the VAT rate are passed on to the consumer. That question is really important.

What analysis has the Minister or his Department done of the 9% VAT rate? Has definitive research been done to make a strong case to continue this in next year's budget? I would definitely be against it being a permanent arrangement. Senator Conway talked about having a permanent arrangement. There are many sectors in the economy that are suffering, that need subsidies and that could justifiably argue that they could use a reduction in VAT for employment prospects, the economy, regional benefits and a range of other matters. I do not think it is acceptable or right. There are very profitable hotels and restaurants in Munster, Leinster and all over the country. I was in Limerick the weekend before last and I know how difficult it was to book accommodation there and eat there. One hotel I called to was booked for four days. That is great news. I am celebrating that and think that is great. It is the same if one goes to Galway. That is a good story. They were propped up at a time when they needed the benefits, and a case has been made. I would like to see the cost-benefit analysis. Where is it all going now? At best, there could be a case of phasing this out and bringing the rate slowly back up to 23% over a two or three-year period. I do not support retaining the 9% rate. It is not a responsible thing to do. It may be the easy option for people who may be coming under pressure from the hospitality, restaurant and hotels sector, but I do not think it is the right thing to do. It should be reviewed.

I accept all the other aspects of the motion. Senator Conway eloquently outlined how he wanted to develop entrepreneurship and encourage development in the whole sector. I have no difficulty with any aspect of the Government's proposed motion. My only concern relates to the 9% rate. We should at least be phasing it out. Even if not today or tomorrow, there should be a plan to phase it out. I realise that people have made plans. It takes a while to adjust to new changes and regimes. It should be phased out within two to three years at the most. I do not think any strong, cogent case could be made to sustain it.

I wanted to mention the skill sets in education. The previous Senator spoke about it. There is a real need to develop education and training for the hospitality and the whole food sector. The Minister might discuss how we can develop that with his counterparts, the other Ministers with responsibility in that area. We need buy-in from the sector, and the owners in the hotel and restaurant sector. What are they doing, and what case can they make themselves to retain some reduction in VAT? Having considered it all, I believe it should go. It is just a question of when. A reasonable approach for a Minister like Deputy Ross would be to suggest that it be totally phased out over a two to three-year period.