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Financial Resolution No. 3: Value-Added Tax (Continued)

Tuesday, 9 October 2018

Dáil Éireann Debate
Vol. 973 No. 2

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(Speaker Continuing)

[Deputy Danny Healy-Rae: Information on Danny Healy-Rae Zoom on Danny Healy-Rae] As I said earlier in the day, when one is an employer Friday evening comes very fast and one must find the money to pay everyone. I am very surprised by what has happened. I believed we were safe when we had a Minister of State from my constituency. I did not or would not expect anything from the Minister for Transport, Tourism and Sport, Deputy Ross, because he is totally against rural Ireland. I cannot understand what has gone wrong with the Government because it was the reduction in the VAT rate that bailed out the sector and helped it to survive and keep going.

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher I call Deputy Carol Nolan.

Deputy Danny Healy-Rae: Information on Danny Healy-Rae Zoom on Danny Healy-Rae They were just getting level and starting to get on their feet but now they are being trounced back down again.

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher If I were unreasonable I could allow somebody to speak for the next 20 minutes. We must take the vote at 12 o'clock. I just ask Members to be reasonable. It is in their own interest. I ask for an informal agreement that each Member should have about two minutes.

Deputy Carol Nolan: Information on Carol Nolan Zoom on Carol Nolan The proposal to increase the VAT rate to 13.5% is extremely unfair. I do not support any VAT increase, particularly in rural counties, regardless of whether it is the 11% rate proposed by some parties or 13.5%. It is extremely unfair.

I have been contacted by many owners of small businesses from counties Laois and Offaly and learned that they are absolutely struggling to pay rates and to meet ever-rising insurance costs. The Minister, Deputy Flanagan, will know this from his town, Mountmellick. I have heard many concerns coming from there also.

The proposed measure will have a serious impact on the progress that has been made. It is slow progress in regional areas. We are not making the same progress as areas such as Dublin, which was mentioned. We have the Hidden Heartlands tourism strategy but it is in its infancy. We do not know with certainty whether it will work. Therefore, it is an absolute insult to small businesses to turn around and slap them with this measure when they are struggling to keep their doors open every day. Many restaurants and hotels in rural areas, particularly in regional areas such as Laois and Offaly in the midlands, will struggle. Only earlier this week, Gerard Brady, head of tax and fiscal policy in IBEC, expressed serious concern over the proposed measure, stating that higher prices when consumers are facing rising costs will lead to fewer customers and lower expenditure among those customers who are spending. The increase will be absorbed in urban areas but not in rural areas, which are struggling.

Deputy Declan Breathnach: Information on Declan Breathnach Zoom on Declan Breathnach I commend the sector, which lobbied hard, certainly on social media, not to have this issue before the House tonight. What is being experienced by the sector in rural areas is not being experienced elsewhere, particularly Dublin. I refer in particular to the food sector. It is inevitable that this resolution will be passed tonight but I appeal to the Minister for Finance, who, unfortunately, is not here, to bring about some form of remission or to carry out a review of rates in conjunction with the measure. I cannot wait for the new rates Bill to be introduced in the House. It will allow people to pay on the basis of ability or accrued income where they are making profits. The industry is struggling in the Border region. I firmly believe the move is the wrong one.

I wish to comment on the support for local newspapers. I understand the logic to the argument about their survival. It is very difficult coming from a Border constituency to understand why I can buy a newspaper for £1.30 in Newry when that same newspaper costs €2 in this jurisdiction. There is something wrong with the system and it needs to be addressed, particularly in regard to cross-Border development and tourism in the Border region.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin The 9% VAT rate was brought in initially by me and the former Minister for Finance, Deputy Michael Noonan, as a job creation effort in 2011.

Deputy Charles Flanagan: Information on Charles Flanagan Zoom on Charles Flanagan Temporary.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin It worked. It was funded by a very unpopular levy on pensions, over which the Minister will recall we were beaten up. It worked as a job creation effort. It is now clear that there are very large hotel groups coining money that do not need a taxpayers' bailout but there are a number of others who will be affected by this measure. I refer to small family restaurants, small family hotels, small operators in the hairdressing industry and so on who need the support of countervailing measures.

The Minister will have very broad support across the House in regard to the big hotel groups that are coining money but we do need to have specific measures for the others. Before this measure takes effect early next year, there will be time to introduce supportive measures to ensure the family enterprises are not hit. They need to be assured tonight that they will be helped out when this measure is introduced in January.

Deputy Eugene Murphy: Information on Eugene Murphy Zoom on Eugene Murphy This is a really retrograde step. I have spoken about it to restaurateurs in particular. I spoke to restaurateurs in Ballinasloe only yesterday and to those in other parts of my constituency, including Strokestown, Castlerea, Carrick-on-Shannon and Termonbarry. All of these people pleaded with me not to allow the rate of VAT to increase to 13.5%.

There was great enthusiasm in recent months when the Hidden Heartlands initiative was announced. There was a real feeling in the community that it represented a new beginning. However, this has been very much dampened today by this announcement. Like Deputy Brendan Howlin, I ask the Minister for Justice and Equality to go back to the Government with this issue, even if the result is an increase of 2%. The increase will mean jobs will be lost. We must take account of the fact that smaller restaurants and small family hotels have faced significant increases in insurance costs. Their premiums have increased by more than 100% in recent years. Revaluation has taken place. These people are struggling. This is the last thing they want. There is no doubt that part-time jobs, which have been very important to the rural areas, will go. Again, I appeal to the Minister strongly to go back to the Government and at least try to do something in regard to this matter. It is serious.

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher I remind the other Members that, given the number who still wish to contribute, there may not be time for the Minister to respond. If they could speak for about a minute and give the Minster time to respond, there will be sufficient time. Otherwise, they will not have time. It is not a matter for me; it is the House that decided this.

Deputy Kevin O'Keeffe: Information on Kevin O'Keeffe Zoom on Kevin O'Keeffe It is ironic that the Minister for Transport, Tourism and Sport, Deputy Shane Ross, and other members of the Government have tried to tell us in the brief period in which I have been a Member of the Dáil that they cannot differentiate legislatively between rural Ireland and the greater urban area of Dublin. On this issue, we are told there cannot be a different VAT rate for rural areas and Dublin because of the legal implications. It is ironic that the Government can hide behind the legislation stipulating we cannot have separate tax arrangements for rural areas and Dublin. Did the Government not examine alternative taxation arrangements?

Down through the years, many small hotels thrived on the profit from nightclubs. The nightclubs are doing no business now.

Deputy Martin Ferris: Information on Martin Ferris Zoom on Martin Ferris All of us are very conscious of the position of small hotels, small guesthouses, pubs and hairdressers in rural areas by comparison with that of big hotels in Dublin, which can increase prices for their own selfish benefit. The measure being introduced is a mistake. In saying that, I do not believe it is realised that people working in the small hotels, guesthouses and pubs are all local. They are on the minimum wage. Whatever few bob they get is circulated in the local economy and helps to sustain the local economy.

I cannot help but feel that Fianna Fáil is going to vote against this. If its members do not, the are absolute hypocrites. They are hypocrites if they stand up here and castigate this resolution and then vote the other way. Mother of Jesus, what are ye at, lads?

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher I call Deputy Pat Buckley.

Deputy Martin Ferris: Information on Martin Ferris Zoom on Martin Ferris Will ye stand on your own two feet? Have a bit of balls, stand up and play it by your conscience. That is what you should do.

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