Restaurants Association of Ireland reacts to July Stimulus Package

• Restaurants Association of Ireland: “No decrease in Tourism VAT rate is a nail in the coffin for border Restaurant & Hospitality businesses competing with 5% rate in Northern Ireland”
• Restauranteurs – “July stimulus is cold comfort to thousands of Restaurant and Hospitality Businesses across the country”
• RAI – “Extension of TWSS welcome but absence of tangible business supports shows lack of imagination, understanding and disconnect from small businesses in Ireland”

Key Elements of July Stimulus Package do not support job retention in restaurant sector

• Issues such as insurance reform and commercial rents / leases were notably absent from the package
• The July Stimulus ignores of immediate legislative issues is detrimental to the hospitality industry
• Restaurants Association of Ireland glad to see extension of the Temporary Wage Subsidy Scheme, inclusion of seasonal business, extension of Commercial Rates Waiver, and expanded Restart Grant in the July Stimulus Package after months of tireless lobbying

Adrian Cummins, CEO of the Restaurants Association of Ireland, said:

“By not decreasing the Tourism and Hospitality VAT rate today in line with our EU counterparts and closest neighbour today’s July Stimulus has put a nail in the coffin for border Restaurant & Hospitality businesses competing with 5% rate in Northern Ireland

We are questioning the decision not to include a grants package for Tourism and Hospitality in today’s July Stimulus. We appeal to Government to support businesses to reopen, to retain employees and keep the economy going!

To ignore immediate legislative issues such as; insurance reform and commercial leases until October’s Budget would result in the demise of a significant number of businesses and immediate job losses.

I am appealing to the Government to rethink this decision and to support independent tourism and hospitality businesses around the country with a targeted grants package!”

The Restaurants Association of Ireland have expressed their concern that the lack of legislative issues addressed in the July Stimulus package such as insurance reform and commercial leases could prove detrimental to the industry. While the extension of the Temporary Wage Subsidy Scheme and inclusion of seasonal and new businesses, an additional restart grant, and the decrease in alcohol VAT rate to 21% announced in the July Stimulus package today are welcomed, there are concerns that without further supports implemented, many local businesses, the backbone of Irish communities, will close permanently.

If the government fails to act, this lack of support for Irish restaurants could cost the state €2.8 billion over the next 24-month post-COVID19 period, according to Economist Jim Power’s Report “Restaurant Recovery Plan” presented to all Government Departments and TD’s in June. This report by Jim Power Economics also states that there are 100,000 jobs at risk in the sector, and that “Without aggressive and effective official policy supports, many of these businesses will be forced into bankruptcy.”

Economist Jim Power warned Government as early as April that the costs of not Supporting the Restaurant Sector would be significant. If 100,000 workers were to remain unemployed for a full year it would costs the exchequer

• around €2 billion in increased social protection expenditure.
• €500 million in lost payroll taxes.
• €240 million in lost VAT receipts; and
• and local authorities around €52 million in lost commercial rates.

Read his full report “A Plan to stabilise and re-build the Irish Restaurant Sector” here.

By not supporting businesses in the July Stimulus today Government has passed on significant costs to the exchequer that could have been avoided.