John Cummins (Fine Gael) | Oireachtas source

I feel this is an important and timely Commencement debate on the pressures being faced by small businesses right across the country. To be clear, I am talking about those that are predominantly high-labour, low-margin, food-based businesses, but also small retailers like the corner shop and newsagents. We all know that many elements of our economy are doing exceptionally well at the moment.There are record-low unemployment levels because of the pro-business approach by the Government over the past number of years, particularly during the pandemic period when exceptional supports were put in place for individuals and businesses to stay afloat. We know that was the right thing to do because of how well our economy bounced back after the pandemic. Equally, I am sure the Minister of State would acknowledge that there is a cohort of businesses which are struggling at the moment. I speak to those small businesses every week across Waterford city and county. They are the heartbeat of our cities, towns and villages. They are the cafés and restaurants where we have our special occasions, the fish shop, butcher and bakery where we get essential items and the newsagent and deli where we get sandwiches and newspapers. The Minister of State visited many of them with me last year in Dungarvan and Waterford city. One business owner to whom I spoke last week, who has a café and restaurant, has a margin that has gone from 9% to 1% in a very short time. That is not because of anything he has done differently. That is the point. There is no one factor that has caused these pressures. Rather, the cumulative effect is squeezing margins. Energy costs for businesses continue to be exceptionally high. We supported businesses last year through the temporary business energy support scheme. While domestic rates are starting to come down, business rates are still very high. They are causing problems. The minimum wage increased to €12.70. It is not the increase itself but upward pressure from those a few euro above the minimum wage that is causing the squeeze. Tax warehousing will be an issue for many. While there has been a reduction in the amount of warehoused debt and the number of businesses that have warehoused debt, there must be in-built flexibility over a short period. Those businesses need to know that flexibility will be available to ensure they can trade out of this challenging period.

The common denominator across the businesses that are struggling is that they are food-based. The Minister, Deputy Donohoe, introduced a special rate of 9% at a difficult time in November 2020. That was increased for the whole hospitality sector in the last budget back to the normal rate. There is a strong case for differentiating between food-based businesses and the wider hospitality sector. We saw price gouging across the hotel sector, largely by the chains in the capital and not by smaller hoteliers in regional Ireland. Food-based businesses are struggling.

A communication campaign is needed around the increased cost of business support grant scheme. What is it exactly? How will it be paid? It is essential for cash flow at the moment. It is vital that support gets out to businesses now and not in a number of months. They need cash flow in now, in January.