Restaurants Association of Ireland calls for Reduced Employer’s PRSI rate in Budget 2016

• The RAI are calling for the widening of PRSI bands which will bring minimum wage workers out of the tax net.

• Shortage of Chefshas now reached crisis levels, and threatens the success of the Tourism and Hospitality Industry. 5000 required in 2016.

• VAT rate of 9% must be retained until 2020to ensure continued job growth in tourism.

• The RAI are calling on the Government to Reduce the Current Rate of Excise Duty on Wine to encourage spend in restaurants and encourage sensible drinking through dining.

• Lift the ban on the sale of alcohol on Good Friday.

• The RAI are calling on the Government to invest in rural areas.

The Restaurants Association of Ireland (RAI) today launched its Pre- Budget Submission 2016. “A Progressive Plan to retain current effective measures in Government, enable stimulation of both rural and urban tourist centres, and sustain economic competitiveness in Ireland.”

1. The RAI are calling on the Government to reduce the employers PRSI rate of 10.75% to 8.5% for employees earning up to 400 per week, should an increase in the minimum wage by 50 cent occur.

The Low Pay Commission has recommended to Government to increase the National Minimum Wage by 50 cent to €9.15 per hour. The Restaurants Association of Ireland believe, that should there be an increase in the minimum wage, it is vital that employer PRSI is reviewed. The Low Pay Commission report reveals that at the proposed rate of €9.15 per hour, the extra cost for an employer per year is €1517.70 while the employee will be worse off by €0.85 when PRSI, tax and USC are taken into account.

• Changes to PRSI Bands:

An increase in the National Minimum Wage will have a devastating effect on the Restaurant Sector and will lead to cut in hours and job losses. An increase in the minimum wage to €9.15 must be accompanied with a widening of the PRSI weekly pay band to alleviate the unbalanced cost attributed to the employer. Not only this, a minimum wage employee will be worse off by 2 cent should the minimum wage increase and the PRSI bands not be changed as illustrated in the table;

Restaurants Association of Ireland calls for a revision of the proposed minimum wage increase

A minimum wage increase benefits no-one but the Government.

An increase in the minimum wage to €9.15 must be accompanied with a widening of PRSI weekly pay band to alleviate the unbalanced cost attributed to the employer.

2. Shortage of Chefs – Re-establishment of CERT, the former State Tourism Training Agency

Speaking on the crisis, RAI Chief Executive Adrian Cummins commented, “CERT, the Former National Tourism Training Agency was established in 1963.  It ceased to operate and was closed down in May 2003.  The restaurant sector are calling for the immediate re-establishment of CERT, which the tourism and hospitality sector held in high esteem while it was operational.  It was fit for purpose and serviced the industry with skilled labour during its operational years.”  Currently 1800 chefs qualify each year from certified culinary training programmes.  There is a deficit of 5000 chef trainees annually.

3. VAT rate of 9% must be retained until 2020.

• Since the VAT cut 32,558 Jobs were created in Tourism & Restaurants.

Regarding the 9% VAT rate, Chief Executive Adrian Cummins warned that it is critical that the reduced VAT rate is kept in place for until 2020, in order for the Irish economy to remain competitive.
“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.
Since the VAT cut, employment in the restaurant and tourism sector increased by approximately 22,300 direct jobs with an additional 10,258 indirect jobs which gives a total employment increase of 32,558. This growth will continue if VAT at 9% remains in effect” said Adrian Cummins.
Adrian Cummins CEO of the Restaurants Association of Ireland, says that the VAT rate is crucial to the survival of restaurants the length and breadth of the country. “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. Restaurants all over Ireland are relying on the VAT to remain at 9% for the survival of their business.”
The Irish restaurant industry employs 72,000 people (1 in 4 tourism jobs) and contributes €2 billion to the Irish economy each year.

• Irish restaurateurs pay the highest catering wage rate in Europe
  • Ireland has the highest excise duty on wines in Europe
  • Irish food costs inputs are 18% above the European average
  (‘Cost of Food Preparation Report’, commissioned by Fáilte Ireland)

4. Reduce the Current Rate of Excise Duty to encourage spend in restaurants

• The savage increase in Excise Duty in Budget 2014 has crippled many restaurants. The RAI is calling for the current rate of Excise Duty to be reduced.
• Tourists and Irish consumers compare Irish prices with those in other tourist destinations, e.g. Spain, Italy, Portugal, Greece and Germany where there is no duty on wine. Wine served with a meal in a restaurant should attract the rate of 9% VAT applicable to food in restaurants.
• This reduction will impact on excessive unregulated home drinking as well as encouraging sensible drinking in a regulated environment.