Minister defends plans to cut VAT for hospitality sector 'to keep it sustainable'
Vivienne Clarke
Minister for Enterprise, Tourism and Employment Peter Burke has been defending plans to cut VAT for the hospitality sector.
“The tourism sector is a very important part of the economy. At this point in time, over 200,000 people are employed in it. It's a €9 billion sector. And it's so important to try and keep that sector sustainable,” he told RTÉ radio’s Today show.
“We've seen over the last number of years a very significant number of independent small food outlets and coffee shops come under pressure, many restaurants closing their doors. But this is a jobs measure to sustain the employment in that sector, which is critically important to me as Minister for Tourism and critically to get that regional balance because many of these jobs are located in regional parts of Ireland and it's so important that we have that growth in those key sectors.”
Mr Burke said that the cut in VAT would be a stimulus measure. “It is a viability measure, they are under significant pressure. We've had a lot of additionality from government, part of it over the last three years, in terms of regulatory requirements in the trajectory to a living wage and sick pay in so many areas that have put significant pressure on the sector and have reduced their margins.
“I've been in coffee shops and indeed restaurants where I've seen their margins diminish and some making a very significant loss that they weren't the prior year, considering in many cases their trade and turnover has sustained.
“So critically it's very difficult to ask everyone to pass it on but we need to ensure that we keep the jobs in the first place and that's the prism I look through when I have a sustainability piece like this. This is to protect all of those over 200,000 jobs. To try and grow the sector because there's a very exciting new tourism plan which we'll be bringing out in September and part of that will be an all-island food strategy and also giving Failte Ireland the power to develop the restaurant sector as well.”
The Minister said that the best value for money would be to sustain jobs.
“We've learned one thing in this economy and we've proven it. And we have been almost Teflon as a government on this. We've pushed 90,000 jobs into the economy over the last 12 months. And considering when we're at or about full employment, to put 90,00 extra households with additional income into them with more jobs is very significant.
“We have a huge amount of jobs, almost 600,000 put in since the pandemic. And that's been the premium of this government, because for any household, the route to give you a chance and opportunity to realise your ambition in life is a job. And the more good quality jobs we get into the economy as well, that's what I'm focused on with many of the different sectors we're working on, trying to ensure that we have the building blocks to sustain the high-level of high-quality jobs we have in our economy.”
