Bernard Durkan (Kildare North, Fine Gael)
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236. To ask the Minister for Finance the extent to which he can continue to support sectors currently making a major contribution to the economy, such as the agrifood business, given the urgent need to ensure continuity of supply in the future and economic independence; and if he will make a statement on the matter. [21786/23]

Michael McGrath (Cork South Central, Fianna Fail)
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Small and medium size businesses (SMEs) play a pivotal role in our domestic economy supporting thousands of jobs each year. Labour intensive sectors, such as the agri-food sector, have helped drive down the unemployment rate to just 3.9 per cent in April, the lowest monthly unemployment rate since 2001.

Over the past year, Ireland along with almost all other advanced economies, has had to grapple with the effects of multi-decade high inflation. What started as an energy price shock, quickly spread to non-energy goods and services, creating broad based inflationary pressure. This has raised the everyday cost of doing business for many SMEs at a time when many businesses have had to contend with tightening financing conditions. Since last summer, the ECB has increased interest rates by 3¾ percentage points. Although necessary to avoid inflationary pressures becoming entrenched, this has raised debt service costs for both households and SMEs.

In recognition of the need to support our SMEs during these challenging times, Budget 2023 introduced a Temporary Business Energy Support Scheme (TBESS) to assist businesses with their energy costs. In February, a further package of cost of living supports was announced, which included an expansion of the eligibility criteria and application period for the TBESS scheme. In addition the Government announced an extension of the reduced rate of VAT on tourism and hospitality to end-August. By providing these supports the Government is ensuring that we can maintain a vibrant and sustainable SME sector in Ireland.

My Department will continue to closely monitor inflationary developments over the coming months and will ensure that the correct steps are taken to manage the ever-evolving situation.