Thursday, 12 May 2022
Department of Enterprise, Trade and Employment
Small and Medium Enterprises
166. To ask the Minister for Enterprise, Trade and Employment the engagement he and his Department have had with SME's who are struggling with fuel and inflationary costs; and if he will make a statement on the matter. [24041/22]
As the Deputy is aware, Government have responded with up to €2.1 billion in measures to date to mitigate the rising cost of living including a personal income tax package worth €520 million, a social welfare package is €550 million & we have reduced VAT from 13.5% to 9% on gas and electricity bills from the start of the month until the end of October.
The Government has already implemented several measures to help ease the impact on enterprises of energy price increases including reductions in VAT and excise on some fuels, as well as a temporary grant scheme to hauliers.
Earlier this week the Government announced the extension of the 9% Value Added Tax (VAT) rate for the tourism and hospitality industry for a further six months; a measure for which €250 million is the estimated cost to the exchequer which will derive value for the sector.
My Department’s Enterprise Forum met most recently on 16th March 2022 and was convened at the request of the Tánaiste to hear first-hand how the war in Ukraine is affecting businesses in Ireland. One of the main issues raised at that meeting was concern over energy security and prices.
Alongside other Fora led by my Department, such as the Retail Forum and the LEO Steering Group, I regularly meet with business representatives and relevant stakeholders where a range of issues are raised including fuel and inflationary costs.
The agencies under my Department’s remit also continue to implement a range of programmes open to SMEs to increase their energy and other efficiencies thereby reducing costs with a view to maintaining and improving their competitiveness.
Enterprise Ireland also regularly survey impacted clients which helps to inform our thinking on how best to help these companies remain resilient to current and future shocks and disruptions. Enterprise Ireland continues examine any necessary measures to help companies respond to the current business pressures. In particular, they are considering how the EU's temporary state aid crisis framework could be used to assist companies which are vulnerable but viable.
The Climate Enterprise Action Fund currently being administered by Enterprise Ireland which helps firms to plan climate action will be further built upon with additional funding for a range of initiatives launching later this year. These will fund investment in carbon measurement and abatement technologies for manufacturing enterprises and will be open to clients, or potential clients, of Enterprise Ireland, IDA Ireland and Údarás na Gaeltachta.
LEOs also support clients to reduce costs with initiatives such as Green for Micro, Lean for Micro and the Trading On-Line Voucher programmes.
The recently launched Climate Toolkit for Business also provides a useful resource to firms seeking to better understand their carbon footprint and plan.
Government Departments have been consulting with stakeholders on specific measures that could be considered to ameliorate the short to medium term challenges to energy security. The Energy Supply Emergency Group is an inter-departmental and inter-agency group with responsibility for informing the Government response to the impact of rising energy costs on business, in addition to security of energy supply more generally, and a longer-term reduction in Ireland’s dependency on imported oil and gas.
Under the aegis of this Group, my Department has established the Business Energy Users Sub-Group to lead on consultations with business and industry to learn about the specific impacts on Irish businesses, and to hear their concerns and perspectives on the appropriate and most effective tools for policy action. The work of this sub-group, as part of the wider Energy Supply Emergency Group has informed the National Energy Security Framework which was launched by the Government on 13th April 2022.
The Government has provided clear and practical guidance to business users on ways of maximising their energy efficiency and thus helping to manage overall levels of demand across our energy networks. This guidance is available on www.gov.ie.
In the long term the Government are working towards having up to 80% of our electricity from renewables by 2030, which will make a significant difference in protecting Ireland from similar energy price shocks in future.
We are encouraging and supporting firms to make investments in increased energy efficiency and a reduced carbon footprint, for example, SEAI, provide direct grants such as the support scheme for renewable heat, project assistance grants, the EXEED grant scheme, tax incentives available through the Accelerated Capital Allowance, and funding for energy audits.