Pat Casey (Fianna Fail) | Oireachtas source

I welcome the Minister of State back to the House, and I promise I will not mention the VAT refund scheme today. I will leave him alone on that issue. The economy is going through a turbulent time, with the two most dramatic impacts which none of us probably ever believed we would be dealing with, namely, Brexit and Covid-19. These impacts have disproportionate effects on different elements of the economy. Equally, some sectors of the economy are doing exceptionally well during this time, and that must be acknowledged also. This budget, however, is framed against the backdrop of Covid-19 and its impact. I must acknowledge the support, and the certainty of that support, which has been given by the Government to businesses to try to sustain them and allow them to stay open. Direct support was provided through the CRSS, the EWSS, the restart grants, the commercial rates waiver scheme, access to cheap money, the PUP, etc. I will come back to some of these aspects and address them later. There has also been significant support provided through indirect funding from other State agencies.

When Covid-19 arrived, people in business had all sorts of plans which were affected, especially in my sector, in the short term. We all hoped it might be another seasonal thing which would hit us for two or three months and then we could get out of it. That has not been the case, however. It has now almost become a long-term crisis, and my greatest concern now lies in the long-term impact this situation is having on the financial viability of businesses, specifically smaller businesses. I have some issues regarding the future. Most of these businesses are probably operating weekly losses. Those businesses had probably calculated these weekly losses based on a period of something like eight weeks, but that has now extended to 30 or 35 weeks and they are not 100% sure where this is going to end.

Without the EWSS and the CRSS, businesses would be closed now. I do not deny that. I must also acknowledge the efficiency with which the payments are being received by businesses. I do not have exact figures, and it would be nice to get an analysis of them, regarding the warehousing of our taxes, specifically concerning how much is being used by businesses and how often. I ask that because businesses operating weekly losses are relying on that mechanism more and more to lodge their debt and allow them to keep going from week to week. The problem, however, is that that debt still exists. Once September arrives next year, there will be a call on that debt and there will then be a charge of 3% on that debt any time after its non-payment. Are we, then, just transferring the viability of businesses from today to next September, possibly, because of these weekly cumulative losses that businesses are sustaining?

I have some reservations, therefore, concerning where businesses will find themselves in September 2021. As a business person, I appreciate the supports which have been provided. I spoke previously about how vitally important the CRSS was, but I have a level of frustration in that regard as well. It was not quite portrayed as something which would be the salvation of businesses, but certainly as a huge support. However, the CRSS continues to get more complex and complicated.It depends of the level of turnover being less than 30%. I have issues with cliff-edge support schemes, such as the employment wage subsidy scheme, where an employer going over 70% turnover loses it completely and going over 30% results in the loss of CRSS completely. There is no harmonisation or transition period to gradually adjust. If I am in business now, I need to keep under 30% or under 70% so that I get the payments and can keep the business afloat. I do not know what happens after that.

Employers qualify for CRSS under level 3. Government tweaks allow hotels to bring guests into the restaurant. A small business might have been getting a subsidy of €1,000, €4,000 or €5,000 and all of a sudden that is lost because just one element of its business has been reopened under level 3 which was not open under the previous level 3 but yet it is based on restricted capacity. All restaurants are operating at 50% or less of their capacity. Even though access to the premises is not being restricted, the business is being restricted in the level of turnover compared with normal times. We should consider tweaking CRSS to address this issue. I am more concerned about the collective losses businesses are sustaining that we have not seen yet. Many businesses are parking their debt until a future date.

The accelerated capital allowance for farm safety equipment is very welcome.

I understand where the Government is coming from. Equally the Government needs to understand the frustration for struggling businesses. Opening, closing, hiring staff, letting staff go and trying to find staff again especially at Christmas time are all having a direct impact on businesses which are trying to sustain themselves. I look forward to Committee Stage where we can go over all this again.