Written answers

Thursday, 8 February 2024

Department of Enterprise, Trade and Employment

Business Supports

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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45. To ask the Minister for Enterprise, Trade and Employment his Department’s efforts to support the hospitality sector. [5300/24]

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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The Government is acutely aware that businesses in all sectors are concerned about the impact of rising costs.

As you are aware, I co-chair the Hospitality and Tourism Forum with my colleague Ms Catherine Martin T.D., Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media. The most recent meeting was held on 24 January, where many issues affecting the sector were discussed including the return to the13.5% VAT rate for the hospitality sector, insurance costs, the increased costs in energy, the new employment rights legislation and associated costs, etc.

The Government has provided significant support to business throughout the period of increasing costs and has been proactive in limiting the fallout from higher rates of inflation in input costs and prices. However, it is not possible to insulate every business from the total impact of these costs.

Over the two-year period prior to Budget 2024 a total of €12 billion – 4½ per cent of national income – was provided in cost of living and doing business supports, comprising a mix of permanent and one-off measures, to ease the burden of inflation on households and businesses. The main programme introduced by Government to alleviate cost pressures for small businesses was the €1.3 billion Temporary Business Energy Support Scheme.

Budget 2024 also contained several measures which will support businesses facing increased costs. This includes, among others:

The 9% VAT reduction for gas and electricity was extended for an additional 12 months, until the 31st of October 2024;

The temporary excise rate reductions applying to auto diesel, petrol and marked gas oil were extended until the 31st of March 2024; and,

There was an increase in VAT registration thresholds for SMEs to €40,000 for services and €80,000 for goods.

Also, as part of the Budget 2024 package, and in order to help businesses with their increasing overheads, the Government announced the introduction of the Increased Cost of Business (ICOB) grant, which is intended to aid firms with the challenge posed by increased costs. Officials in my Department are currently working with the Local Authorities on the administration of the ICOB grant to ensure that support can be provided in early 2024.

My Department, in collaboration with the Department of Social Protection, is also assessing the cumulative impact of forthcoming changes to working conditions, including Pension Auto-Enrolment, Parent’s Leave and Benefit, Statutory Sick Pay, the Additional Public Holiday, the Living Wage, and Remote Working. This follows a recommendation by the National Competitiveness and Productivity Council that a cumulative impact assessment be undertaken. The report is due to be finalised in early 2024 and will inform public policy in this area.

The Local Enterprise Offices (LEOs), also play an extremely important role as part of a supportive ecosystem, providing their services direct to small businesses and promoting entrepreneurship within towns and communities across the country. They act as a ‘first stop shop’ providing expert advice and guidance, financial assistance, and offer a ‘signposting’ service for all government supports available to business owners throughout the country.

The LEOs provide a suite of productivity and competitiveness supports to small businesses in the areas of Lean, Green and Digital. These include the Trading Online Voucher, Green for Business, and the Energy Efficiency Grant. The ‘All in a Day’s Work’ national campaign emphasises the benefits of these supports for businesses; namely saving them time, energy and money.

It is recognised that elements of the hospitality sector are an important part of the wider tourism ecosystem, hence the ongoing engagement of my Department and Minister Martin’s Department through the Hospitality and Tourism Forum.

Fáilte Ireland delivers varied supports to business which are set out on their website www.failteireland.ie and provide specific supports for restaurants and cafes. In particular, Fáilte Ireland continues to focus on the development and enhancement of the food experience for the wider domestic and international visitor audience. As such, food is incorporated into Fáilte Ireland’s overall Corporate Strategy and its Regional Tourism Development Strategies.

Fáilte Ireland’s work centres very much on those food businesses that are in tourism and focus on the visitor and engage at destination level in cross-promotion and selling with other tourism businesses, or those that market directly to visitors.

Failte Ireland is also engaged in ongoing work involving the outdoor dining capital funding programme, the Digital That Delivers Programme, and involvement with the Nighttime Economy Taskforce.

Earlier this week, Minister for Finance, Michael McGrath, announced significant changes to the Tax Debt Warehousing scheme with a reduction in the interest rate applying to warehoused tax debt to 0%. In addition, Revenue has confirmed that, where a business has already paid warehoused debt, which was subject to interest at 3%, it will get a refund of that interest. This will ensure that all taxpayers are treated fairly.

These changes to the scheme have been agreed in recognition of the unique nature of the warehoused debt and in light of the Government intention to support otherwise viable businesses to continue to trade while having the opportunity to reduce their warehoused liabilities in a structured and manageable way.


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