Seán Kyne (Fine Gael) | Oireachtas source

I welcome the Minister of State and the Bill, which gives effect to many of the measures published in the July stimulus initiative. The stimulus involves a €7.4 billion investment in our economy and society and is vital to our efforts to combat the unprecedented pervasive impact of Covid-19. It is only possible because the previous Government's management of the economy means the State is seen as worthy of lending by investors. It is important to make that point because not everyone appreciates it. If we had pursued some of the things that were urged on previous Governments, we would not be able to avail of this money from Europe and elsewhere.

The stimulus is about protecting existing jobs, creating new jobs and supporting businesses, organisations, people and communities across the country. For example, the restart grant continues to help businesses to reopen and to adapt to the new public health necessities. I am very encouraged by the uptake of the grant in counties Galway and Mayo, where some €8.87 million and €4.76 million, respectively, have been allocated in direct payments to businesses.

There are several strategically important initiatives which will be introduced or expanded by the legislation, including the TWSS. The scheme continues to be crucial in protecting jobs and keeping people in work, although not necessarily physically in the workplace. As with all measures and programmes introduced quickly, there have been a small number of issues with the TWSS. I am pleased that section 2 of the Bill will address those issues. For example, a scheme will be available to workers who had been absent due to illness, maternity, apprenticeships or training courses, which is welcome. The Bill introduces the successor to the TWSS, that is, the employment wage subsidy scheme which will come into effect in September. The new scheme will provide a flat rate subsidy of €203 per week to employers for each team member and will be open to all businesses that have experienced a drop in turnover of at least 30%.Crucially for several sectors such as tourism and hospitality, the new scheme will include seasonal staff. I cannot stress how important this is for thousands of businesses in the west of Ireland. The shock to the economy that Covid-19 represents could, without action, cause lasting damage and detrimentally impact some workers who may leave the workforce permanently. We have a duty to do all that is possible to avoid this.

One concern that has been raised with me regarding the employment wage subsidy scheme is the reference period for determining eligibility for the scheme. The impact on turnover is calculated by comparing July to December 2020 with July to December 2019 as per section 2 of the Bill, which amends section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. I appreciate the need for a reference period so the scheme can be properly introduced but the omission of the first half of 2020 would appear odd. Some businesses, particularly in tourism and hospitality, have contacted me and expressed concerns that they will not be able to access the wage subsidy scheme as a result. I would be grateful if the Minister of State could clarify this and explain the rationale for the reference period that has been chosen.

Section 7 will have a positive impact on communities. It introduces the stay and spend initiative, a €270 million boost to encourage and incentivise domestic tourism, which of course is our largest indigenous industry employing more than 260,000 people, almost three quarters of whom are employed outside Dublin. The stay and spend initiative will stimulate demand. Contrary to some reports, it will be available to all taxpayers to offset against USC or income tax, whichever is relevant. The one concern I have about this initiative is the timeframe of 1 October to 30 April. I suppose that is to stimulate demand in the off-peak period. There are some tourism businesses that will close for the winter period. Unless they can be guaranteed that there will be sufficient footfall, it may not be worthwhile in those cases. I certainly hope it will be. We need to make sure there is a marketing campaign for staycations and winter breaks. There are opportunities with some of the remote working hubs to have a combination of work and short breaks in many areas, particularly in the west and on the Wild Atlantic Way.

The provision of a reduced VAT rate from 23% to 21% at an estimated cost of €440 million is a measure I hope will benefit everybody. It will ensure that many businesses will survive and it will provide savings for customers if it is passed on. I am always slightly concerned by VAT reductions because we do not know if they will be passed on. I appreciate that it is an important lifeline for businesses that are struggling and have bills to pay. The measure has great potential notwithstanding the large cost. I refer to the initiative in 2011 made by the Government that came in at the height of the financial crisis when we had high levels of unemployment. That Government put in place initiatives to ensure we stimulated the hospitality and tourism sector, which did create jobs. I wish the Minister of State well in his role.