CEO of Excel Recruitment Barry Whelan offers his thoughts on yesterday’s Budget and its effects on both the retail and hospitality industries
Budget day is always a big news day and yesterday’s announcement by Minister for Finance Pascal Donohoe was no different. Among the old reliables and headline items, there were few big-ticket wins for business owners but the income changes, reductions in USC and increases in social welfare will be a welcome way to encourage and increase consumer spending. There was a number of important measures that will affect both the retail and hospitality sectors, both directly and indirectly. Below are some of the highs and lows….
9% VAT retained- Firstly, I was delighted to hear that VAT at 9% was retained. Excel’s hospitality division has long supported the #KeepVatat9 campaign and its retention yesterday will be greeted with a sigh of relief from many in the hospitality industry. The rate is crucial in keeping not only the tourism and hospitality industries but the Irish economy as a whole, encouraging overseas visitors, economic growth and jobs nationwide. The move will also benefit retailers in tourist hubs.
Sugar tax- While it was a surprise to no-one, many retailers will still be concerned about the sugar tax introduced yesterday. The new tax will mean a 30 cent per litre of tax will be placed on drinks with over 8g of sugar per 100ml. The tax has caused huge controversy and debate, with major lobby groups campaigning furiously for and against in the months leading to the budget. There are still vastly varying opinions about whether it will exactly make a difference and its success in the UK, Mexico, France and beyond. It is important that the results are monitored closely to ensure the tax fulfils its public health agenda.
Cigarettes & Alcohol- A price hike for cigarettes is always on the cards but it’s still going to agitate retailers, particularly when combined with the new sugar tax. The hike will undoubtedly lead to the increase in cross-border shopping and cigarette smuggling, already big problems for hard-working retailers. There will be mixed feelings regarding excise duty on alcohol, relief that it hasn’t gone up but also disappointment it hasn’t be reduced, particularly with the worry of structural separation still hanging over retailers heads.
Brexit Loan Scheme- While it’s still unclear what the Brexit Loan Scheme will look like, the €300m scheme will still a welcome announcement for SMEs trying to safeguard against the unknowns of Brexit. As the only country to have a land border with the U.K and the country bound to be most affected when the U.K leave the EU, it’s vital we begin to protect vulnerable businesses. The success of the scheme will rely on how quickly the details can be ironed out. How competitive will the ‘competitive rates’ be? What will be the eligibility requirements be? How will the government ensure those business most in need will avail of the Scheme?
