Peter Burke (Longford-Westmeath, Fine Gael) | Oireachtas source

I thank Senator Ahearn for raising this important matter and for his ongoing work as Fine Gael spokesperson on enterprise, trade and employment in the Seanad and the great work he does in that regard. In introducing his Commencement matter, he spoke about the action the Government has taken, such as the increased cost of business scheme in 2024. He mentioned the figures for County Tipperary. We will work closely with Tipperary County Council and all other local authorities to ensure businesses get this vital funding into their bank accounts. There is a steering committee in the Department which meets regularly to ensure we review the figures daily, liaising with various local authorities which are finding it difficult to administer this fund. We will continue to do that. On other supports, there is the debt warehousing scheme relating to taxation, introduced during the Covid pandemic, which provided significant support to businesses and was enhanced by changes made to interest rates in February this year. There have also been suggestions that the hospitality VAT rate should be reduced in some form either for the entire sector or for food services, as suggested by the Senator. Last week, I attended the hospitality and tourism forum, at which many actors from the business sector representing tourism and hospitality were at the table. There was very good engagement by them with the Minister, Deputy Catherine Martin. We heard what they had to say. There is a view that the VAT rate is important to a lot of smaller businesses operating in smaller towns and villages in provincial Ireland.

We will work with the Government to put forward the best business package we can in the current budget. I cannot make any commitment on the floor of the Seanad but it is across government negotiations that take place as we form the budget between the Department of Finance and the Department of public expenditure in respect of the supports and grants we will also ensure. At this time, the package we have put forward for the SME sector includes an agreement to reduce PRSI from 1 October. That improves cash flow for businesses, in effect, not taking more of their hard-earned cash off them and making it easier and more accessible to employ those on minimum wage. In addition, the energy efficiency grants are a big support for cash flow, reducing monthly utility costs, be it through improvements to LED lighting, refrigeration or kitchens - areas that can reduce power bills every month. They are a significant asset.

The SME test will be important in future. Any changes to regulation, statutory instruments or legislation will have to go through a test. In essence, it is about thinking small first.This is about how this affects the small business in our locality with regard to changes which are considered in Leinster House, albeit by the Government. We must be consistent in terms of seeing how this affects local businesses.

The Department of Finance is working closely with our Department and has identified that the full year cost for reducing the 13.5% hospitality VAT rate to 9% in 2024 is €764 million, with the cost to the food service sector only amounting to €545 million or 71% of the total cost. Bear in mind that we have other services such as hairdressers who are also an important part of the cog in our service industry which we must take note of. We are looking at this as part of one of the policies in the budget which will be discussed and thrashed out by the Government. People, however, should be very much aware that that is under the parameters which will be set out in the summer economic statement. These will provide the guard rails within which the Government will have to stick. Bandwidth is very tight but we will do our best.

I am confident of one thing which is that we will put forward a very robust and strong package for our SMEs in this budget to show the Government is listening, that we are rewarding enterprise as a country and that we are the best country for business to establish, grow, flourish and employ people.