Brendan Smith (Cavan-Monaghan, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

12. To ask the Minister for Finance the measures he proposes to implement to assist the retail sector to retain business on account of the potential loss of trade to Northern Ireland due to the reduction in the value of sterling; if his attention has been drawn to the widespread concerns of the retail sector, particularly in the Border region; if he has had any recent discussions with that sector; and if he will make a statement on the matter. [34048/16]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

31. To ask the Minister for Finance the measures he proposes to implement to assist the retail sector due to the potential loss of trade following reduction in the value of sterling and the uncertainty that has arisen for business and commerce, particularly in the border region; and if he will make a statement on the matter. [34052/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 12 and 31 together.

I am aware of the impact of recent exchange rate developments on the retail sector, particularly in the border region.

Since the UK's vote on the 23rd June the euro has appreciated by over 15 per cent against sterling.  This will pose significant challenges for our economy, particularly for Irish exports to the UK and also for areas and sectors sensitive to cross border trade.

From a macroeconomic perspective, the best way to deal with such a shock is to enhance the stability of the economy. That is what this Government is doing through prudent management of the public finances.

At a more micro-economic level Budget 2017 contains several measures designed to ensure that firms in Ireland - especially those in the SME sector - are prepared for a potentially more difficult trading environment. This includes tailoring the wide range of State supports currently available such as:

- Low cost credit and increased credit supply from the Strategic Banking Corporation of Ireland;

- Funding for growth and efficiency from Enterprise Ireland;

- Financing from Microfinance Ireland for micro enterprises affected by the UK referendum.

Specific tax measures included:

- Retention of the reduced 9 per cent VAT rate for the hospitality sector - a measure sought by Retail Ireland in their pre-budget submission.

- Reduced Capital Gains Tax (CGT) to help entrepreneurs.

- Extension of the Foreign Earnings Deduction

- Extension of the Special Assignee Relief Programme

- An increase to the Earned Income Tax Credit for self-employed tax payers

- Introduction of an income averaging "step-out" in the agriculture sector

It is crucial to maintain competitiveness and in particular in those areas which we can influence. It is also important to stress that the recent depreciation of sterling is likely to increase UK consumer prices in the near term as increases in import prices give rise to additional inflationary pressures. This will mitigate some of the negative impact on the retail sector in Ireland from the depreciation in sterling.