Business
VAT rate ‘holds the key’ to survival of Galway restaurants
Many of Galway’s restaurants will not survive unless the current VAT rate is retained in next month’s budget.
That’s the prediction from the Restaurants Association of Ireland who have launched a ten-point plan for the survival of the industry, which is responsible for one in four tourism jobs and contributes €2 billion to the Irish economy each year.
Galway man Adrian Cummins, who is chief executive of the association, is leading the charge for the VAT rate not to be returned to 13.5%.
“When the economy went into decline, restaurants endured falling numbers of diners, rising prices and great financial uncertainty, with many having to close their businesses. Money generated by this reduced VAT rate, however, has kick-started a reversal of fortunes,” he stated.
“Since the VAT cut, employment in the restaurant and tourism sector increased by approximately 9000 jobs and this growth will continue, with an additional 5,000 jobs to be created over the next 12 months if VAT at 9% remains in effect” said Mr Cummins.
The association is calling for the current rate of excise duty to be decreased to encourage spend in restaurants.
“The savage increase in excise duty in Budget 2013 has crippled many restaurants. Tourists and Irish consumers compare Irish prices with those in other tourist destinations like Spain, Italy, Portugal, Greece and France, where there is no duty on wine,” Mr Cummins said.
Irish restaurateurs pay the highest catering wage rate in Europe and have to endure the highest excise duty on wines in Europe. Other costs were equally crippling – Irish food costs are 18% above the European average, the waste licence fee has increased from €1,200 to €4,000, with the average restaurant paying €6,254 in waste charges and €15,813 per year on commercial rates.
The association are calling for the creation of a business inspection and licensing authority that absorbs the existing business inspection activities of the Health and Safety Authority, and the National Consumer Agency.
“Restaurants deal with, on average, twenty-five different agencies and authorities in the day-to-day running of their business. Ireland is the most expensive country in Europe to run a restaurant,” said Mr Cummins.
“Restaurateurs are entrepreneurs; the government needs to be reminded of that. When a restaurant opens or expands, they will create several jobs and generate business for the area and their suppliers. In total the industry employs 64,000 people.”
The new President of Local Ireland, the association representing local news publishers around the country, is Head of Irish Times Regionals Dan Linehan.
Mr Linehan takes over the presidency from Declan McGuire of the Connacht Tribune. His appointment was confirmed at the recent Annual General Meeting of Local Ireland at Bloomfield House Hotel near Mullingar, Westmeath.
Mr Linehan, who has served as Vice President of the organisation for the last two years, said: “The coming years are a very important time for local publishers with many important issues to be addressed, including the implementation of the Future of Media Commission recommendations, defamation reform, the role and support for local publishers in public service reporting and helping publishers develop commercial digital offerings.”
Speaking at the AGM, Mr McGuire acknowledged the work done by the Executive in the past two years under the direction of Executive Director, Bob Hughes, on several projects related to the publishing industry but most especially the successful conclusion of the long-running campaign for the abolition of VAT on newspapers.
He also wished Mr Linehan the very best in his new role as President of the association for the next two years.
Mr Hughes thanked Mr McGuire for his leadership and support during his term of office and said he looked forward to working with Mr Linehan on the key policy priorities for the association, including Government supports, Government advertising, fair remuneration for content from the tech platforms and the reform of the legislation for defamation.
Local Ireland members also elected Seán Mahon, Managing Director of the Southern Star, as Vice President for the next two years.
The shortage of affordable housing is the single biggest impediment in attracting and retaining workers in the West, according to business group Ibec.
At a ‘Regional Insights Series’ meeting in the Galmont Hotel in Galway last week, employers were told that capacity constraints and labour supply are the key challenges facing business growth in the region.
Ibec Head of Regional Policy Helen Leahy said: “There must be greater focus by government on enhancing quality of life issues such as housing and infrastructure which are driving labour shortages in the region.
“Ibec’s vision for the West is to realise its potential to become a globally competitive location. An inadequate supply of affordable housing is now the single largest impediment to attracting and retaining talented workers, without whom business investment and expansions are not possible.
“Labour shortages are a real concern for businesses in the region. People decide where to live and work based on quality of life and access to high quality services and amenities. Industry tends to follow talent, and in this regard, the region needs to have all the building blocks in place as the attraction and retention of world-class talent becomes increasingly competitive on a global level,” said Ms Leahy.
Amongst Ibec’s priorities for the West are:
- Addressing housing and infrastructure challenges
- Transitioning towards a new growth model with Net Zero energy powered by Atlantic offshore wind resources
- Adapting businesses to the new economic realities
- Enhancing capacity and skillsets to achieve sustainable development objectives
- Investment in people and skills
- Creating competitive advantage through digitalisation
- Innovation as a key driver of productivity growth
One in five Galway businesses want to go fully cashless, as the move towards card payments and tapping continues unabated post-Covid.
In all, 22% of Galway businesses would like to be fully cashless, according to a survey carried out by BOI Payment Acceptance (BOIPA), a provider of payment technology solutions, which asked Irish businesses about the current payment landscape as well as business confidence and concerns.
Over one-third (36%) of Galway businesses were unaware there is no contactless limit on mobile wallets – just below the national average – while 54% believe the increase in card over cash transactions has helped them run their business.
Six out of ten Galway businesses expect to grow this year despite the cost-of-living crisis and running costs dominating as key concerns; 62% believe their business will grow over the next twelve months despite global economic uncertainty.
Unsurprisingly cost-of-living increases and running costs were the main concerns the majority of businesses had.
For more, read this week’s Connacht Tribune.
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