Seán Kyne (Fine Gael) | Oireachtas source

I welcome the Minister. I acknowledge the range of supports the Government has provided for the hospitality sector, going back to 2020, as the Minister outlined, but back in 2011 as well, when this VAT rate was first reduced to give a kick-start to the tourism and hospitality sector. This is an area that was identified as being prime for growth, and the incentive we are discussing protected existing jobs, increased employment and helped businesses expand at a time of deep recession in 2011.

The tax base is extremely important. The Minister mentioned that the measure will cost more than €450 million in a single year. That has to be balanced against the impact of allowing the rate to increase again and whether that will have an impact on employment and the viability of businesses. In advance of the budget in 2019, the Minister initiated a review of the 9% VAT rate. This found that tourism expenditure is more sensitive to income growth and the economic cycle than price changes, which reduces the relevance of the VAT rate applying to the sector. The Minister might have an opportunity to expand on that matter.

Hospitality and tourism is present across the board in every county and community. It could be argued that the level of prices and price gouging in certain establishments, including within this city, should be distinguished from other establishments and parts of the country where that has not been evident. At certain times of the year and during certain events when there is high demand, it is clear that there is significant price gouging within our capital city. That is a disincentive to tourism. The Minister might be able to advise on whether it is possible to decouple hospitality from the accommodation side of tourism.

There has been a range of assistance provided to businesses. Energy is one issue that has been much talked about. I welcome the initiatives put in place in the budget, but the concern is that a rise in the VAT rate next year could further reduce the viability of certain businesses in the midst of this crisis. Could the timing of be delayed? There is a cost to that, and I know the Government will be keeping this matter under review. Clearly, the Government decision is that there is to be no change and no further extension. The Government will be acutely aware of and keeping cognisance of the sector and the pressures on it in the coming months.