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The Journal
a day ago
- Business
- The Journal
Minister defends VAT cut for hospitality as government accused of breaking promises to workers
ENTERPRISE MINISTER PETER Burke has defended plans to cut VAT for the hospitality sector at a cost of €1 billion. Speaking yesterday at Government Buildings, when outlining the government's Summer Economic Statement, Finance Minister Paschal Donohoe outlined that there will be a €9.4 billion Budget 2026 package , of which €1.5 billion is set aside for tax cuts. Donohoe, and other senior members of government, including the Tánaiste and Taoiseach said last month that all government parties have committed to delivering changes to VAT for the hospitality sector. VAT for the tourism and hospitality sectors was reduced to 9% during the Covid-19 pandemic at a cost of €1.2bn to the exchequer. The previous 13.5% rate was reinstated last August, despite the sector's opposition. When asked how much it is estimated to cost for the measure to be re-introduced, Donohoe said yesterday it will cost €1bn for a VAT reduction from 13.5% to 9% for restaurants and cafes, meaning there would not be much left for further tax reductions for others. He told reporters that he has always been clear that if the government greenlights this measure there will need to be 'trade-offs' in terms of other measures that the won't be delivered. Protecting 200,000 workers Speaking on RTÉ Radio One this morning, the enterprise minister defended the VAT reduction, stating that the tourism sector is a very important part of the economy. 'At this point in time, over 200,000 people are employed in it. It's a €9 billion sector. And it's so important to try and keep that sector sustainable,' said Burke. Advertisement Over the last number of years a very significant number of independent small food outlets and coffee shops have come under pressure, he explained, stating that many restaurants are closing their doors. The minister said that the VAT reduction is a 'jobs measure' that will sustain the employment in that sector. 'It is a viability measure, they are under significant pressure. We've had a lot of additionality from government, part of it over the last three years, in terms of regulatory requirements in the trajectory to a living wage and sick pay in so many areas that have put significant pressure on the sector and have reduced their margins. 'I've been in coffee shops and indeed restaurants where I've seen their margins diminish and some making a very significant loss that they weren't the prior year, considering in many cases their trade and turnover has sustained,' said Burke. Restaurants and cafes are struggling with higher business costs and in some cases reduced demand exacerbated by the increased cost of living, with many in the industry perceiving the reinstated higher VAT rate as a significant pressure on their businesses . Department of Finance says VAT cut is 'unjustified' However, despite the government being determined to bring in the measure, Department of Finance advisory papers published earlier this month in advance of the next Budget, officials said that there are a 'number of reasons' why going back to 9% 'remains unjustified'. It listed the cost to the state, the resilience of the domestic economy, and Ireland's current position as being 'not significantly out of line with other EU countries in relation to the application of VAT in this sector' as among the reasons. 'The cost is very significant,' it said. The news that workers might not feel many benefits in the budget this October has resulted in SIPTU Deputy General Secretary, Greg Ennis stating that private sector workers have been short-changed by government. In a statement this afternoon, he accused the government of 'broken commitments' on pensions, increased sick days and measures to offset the cost of living crisis while announcing tax breaks for business in its summer economic statement. Related Reads Analysis: Delaying details of big projects stinks of distraction ahead of the budget Tax measures and €9.4bn budget package not set in stone until we know US tariff outcome Cutting VAT on hospitality 'unjustified' and too expensive, says Department of Finance He said SIPTU representatives have written to the the enterprise minister seeking an urgent meeting. Ennis said failure to introduce meaningful measures to offset the cost of living crisis is being done at the same time as government promises to provide a VAT reduction to the hospitality sector which will cost the State an estimated €1 billion. 'This morning on national radio, the Taoiseach, Micheál Martin, stated that there was a prior commitment to the hospitality sector on a VAT reduction. However, what about the government's prior commitments to workers with regard to increasing statutory occupational sick pay from five to seven days in 2025, progression towards a living wage in 2026, which has now been shelved until at least 2029, and the abolition of subminimum wages for young workers,' he said. 'Kick in the teeth' for workers 'Without the Government reaffirming and meeting its commitments for improvements for workers in the private sector and a cost-of-living package, the cut in the VAT rate in Budget 2026 will amount to another kick in the teeth to them and their families,' said Ennis. He went on to state that the government has 'gone too far' in placing the interests of business above those of workers. When asked today if customers will see the VAT reduction passed on to customers and if there will be a reduction in prices for those dining out, Burke said: 'So critically it's very difficult to ask everyone to pass it on but we need to ensure that we keep the jobs in the first place and that's the prism I look through when I have a sustainability piece like this.' The government focus now, in the midst of global uncertainty, is to protect jobs, said the minister. Readers like you are keeping these stories free for everyone... 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Irish Times
5 days ago
- Business
- Irish Times
No agreement yet on how proceeds of Apple tax case will be spent
The Taoiseach and Tánaiste are to hold talks on Saturday in an attempt to break the deadlock on how €20 billion in funding for key projects will be spent over the coming years. No agreement had been reached on Friday on spending in five key areas – housing, health, transport, education and defence. Informed sources said nine departments had agreed their funding levels, including justice and energy. Under the €20 billion revised National Development Plan (NDP), to be published on Tuesday, significant additional investment in areas such as housing, water infrastructure, the electricity grid, roads and public transport will be announced. The funding includes proceeds from the Apple tax case. READ MORE There is also expected to be a boost to capital funding in the disability sector, which Taoiseach Micheál Martin said would be a priority area for his Government. However, the amounts sought by Ministers under the revised NDP were multiples of the funding available. It is unusual for defence spending to be a sticking point in such Government negotiations over budgets, given the low levels of expenditure traditionally in this area. However, it is understood that Tánaiste Simon Harris, as Minister for Defence, has sought significant change in how the area is treated by the exchequer. He has said publicly that Ireland needs to boost defence spending and has spoken of moving to a higher level of defence capabilities – based on the findings of the Commission on Defence – including a larger Naval Service and the provision of fighter jets for the Air Corps. [ Focus in Budget 2026 has to be on transforming infrastructure, Martin says Opens in new window ] Sources said there were still issues remaining about funding for new roads. The Department of Transport had, for example, previously advised Ministers that there was a lack of clarity about where money for some projects such as the A5 dual carriageway in Northern Ireland – to which the previous government had committed €600 million – would come from. It was anticipated that this issue would be resolved in talks on the revised NDP. The Government's new housing strategy cannot be completed until the scale of funding available under the plan is known. Funding for key water infrastructure such as the new Dublin drainage scheme and the pipeline to bring water from the Shannon to Dublin is understood to form part of the Department of Housing's proposals, as does the €2 billion scheme to deal with the impact of defective concrete blocks. Sources said the plan would see the largest investment in the electricity grid in Irish history. Minister for Health Jennifer Carroll MacNeill is understood to be pressing for funding for digitalisation of health services including electronic patient records – a project that could cost about €2 billion – as well as new elective hospitals to deal with non-urgent care and more community nursing units. [ Government 'feckless' with public money, Social Democrats claim in budget row Opens in new window ] The Cabinet is scheduled to formally sign off on the revised NDP on Tuesday. However, this is expected to involve only the provision of specific budgets to each department. It is not anticipated that particular projects to be funded will be announced on Tuesday. It will be up to Minsters in each area to decide on individual projects based on the level of funding they have available. Minister for Public Expenditure Jack Chambers told the Dáil on Thursday that at a point of significant economic uncertainty, the Government was 'clearly setting out that we want to seriously increase our overall investment in critical infrastructure, which will provide the growth, prosperity and jobs for the future'. 'We know that housing, energy, water and transport in particular are areas requiring that additional investment,' he said. 'There are other areas that require the additionality to provide for critical services and social infrastructure across communities in Ireland.'
Irish Times
6 days ago
- Business
- Irish Times
Drop in housing commencements was expected after ‘record' year, Taoiseach says
Taoiseach Micheál Martin has rejected suggestions that housing commencement figures are going in the wrong direction, insisting a fall-off was always expected after a bumper 2024. Mr Martin said the lower figures for the first half of 2025 follow the end of a waiver on levies for developers at the end of last year. The suspension of levies for new residential developments was introduced in 2023 to stimulate housing construction. It led to a sharp increase in the level of housing commencements. From 2025, developers once again became liable to pay development contributions to local authorities. READ MORE Last month only 1,356 commencement notices were lodged, the lowest monthly total recorded since 2020. Department of Housing figures indicate the total number of housing commencements this year to date was 6,325 compared with 34,581 by June of last year. Speaking during a visit to Ringaskiddy, Co Cork , on Friday, Mr Martin said the fall-off in housing commencement from January to June of this year was anticipated given what he termed an 'extraordinary' number of commencements in 2024 and 2023. 'I don't think [saying that housing commencement figures are going in the wrong direction] is fair. You have to look at the context. Last year was a record year of 33,000 [housing commencements] because of the waiving of the development levies.' He said the year before this was 15,000. He said it was 'important' that building completions were up in the first three months of this year. Mr Martin stressed the Government had taken significant measures that would lay 'foundational steps' for growth, and there were 'thousands and thousands of houses now in the pipeline'. 'We do need to unblock some of those and that is why the National Development Plan is important in enabling the unblocking of some projects that are already about to happen or in the pipeline itself,' he said. While maintaining public-sector investment, the Government is also focused on attracting further private-sector investment into the construction industry, which he said was 'critical'. 'What will be key next year and in the years ahead will be getting more private-sector construction – particularly in apartments – we need to really increase the level of apartment building,' he said. Mr Martin added that he is concerned about how Ireland will increase housing delivery. 'I am concerned about how we get from 33,000 to 50,000. That is my focus.' 'We have a lot of commencements. We have a lot of planning permissions granted. The issue is how we turn those into buildings.'
The Irish Sun
7 days ago
- Entertainment
- The Irish Sun
‘Cancelled presidential bid', cry fans as singer CMAT takes jab at ex-politician in new song
IRISH singer CMAT has taken a dig at former Fianna Fail leader Bertie Ahern in her latest single. The Stay For Something singer, whose initials stand for Ciara Mary-Alice Thompson, is set to release her third studio album Euro-Country on August 29. 2 CMAT has taken a dig at Bertie Ahern in her latest single Credit: Getty Images - Getty 2 The song is the most recent single from her upcoming album And ahead of the album's release, CMAT has been dropping a steady stream of new singles for thrilled fans. From her chart topping Running/Planning, to her witty and controversial hit The However, with just a little over a month until the highly anticipated record drops - CMAT has taken aim at former Taoiseach Bertie Ahern in the album's latest single. To announce the release of the title track Euro-Country, CMAT shared a snippet from one of the verses which tells the story of the 2008 crash from her perspective as a pre-teen in a small town. READ MORE IN MUSIC Ahern is mentioned by name and loosely features in the music video for the song. As Dunboyne native CMAT passionately spins around a sparsely decorated room, she belted out the lyrics: "All the big boys. All the Berties. All the envelopes, yeah they hurt me." Making reference to the hardships people faced, she continues: "I was 12 when the das started killing themselves all around me. "And it was normal. Building houses. That stay empty even now, yeah. And no one says it out loud but I know it can be better if we hound it." MOST READ IN THE IRISH SUN In the song's music video, the 29-year-old donned a long-sleeved baby-blue top that featured the bejewelled wording "Bertie". And it's not the first time the singer has made her feelings about the former politician known, as in a 2023 interview with Hot Press she scolded the idea of him ever running for president. She said: "I would make it my personal f***ing mission to make sure that he doesn't win." Her forthcoming album deals with the legacy of the boom and bust of the Irish economy in the early noughties through a kitsch euro-trash dream. She previously "My dad had a job in computers, we didn't really have any money, we weren't affluent, but we were fine. "Everybody else on the estate we lived in worked in construction, or in shops, and they all lost their jobs. Everybody became unemployed. "Then, in the village I grew up in, there was a year or 18 months where loads of the people I went to school with, their dads started killing themselves because they'd lost everything in the crash." EUR-JOKING Sharing the snippet of the new song with fans, she wrote: "The fourth single from my forthcoming album, conveniently also named EURO-COUNTRY, is coming soon." Friends and fans raced to the singer's comment section to share their reactions. Darragh joked: "You've cancelled Bertie Ahern's presidential bid and we thank you." Georgina commented: "I was 20 in 2008 and was still trying to figure out a path for myself and remember all of this too well. "I've never felt lyrics to a song so deeply. This is just incredible." Another fan added: "Bye bye Bertie." Despite much speculation Ahern or Fianna Fail are yet to confirm their nomination for the upcoming Irish presidential election.
BreakingNews.ie
16-07-2025
- Business
- BreakingNews.ie
Tariff uncertainty ‘problematic' for fiscal planning, Taoiseach says
Uncertainty around tariffs is 'problematic' for budget preparations and medium-term fiscal planning, the Taoiseach has said. US president Donald Trump has said that he will implement a 30 per cent tariff on EU goods from August 1st if a new trading deal with the bloc is not agreed by that deadline. Advertisement Mr Trump has also threatened to ramp up tariffs on pharmaceuticals from the end of the month, raising concerns on a key sector for the Irish economy. Negotiations between the US and the EU continue as the Government prepares to announce its Summer Economic Statement next week. The Government is also due to provide an update on its five-year fiscal stability plan to the EU. Speaking to reporters on Wednesday, Mr Martin said: 'We're keeping everything under review, but in context of this year, we have fair ideas to where revenue will land and where expenditure will land. Advertisement 'But certainly we're waiting in terms of the midterm framework, the five year programme that has to be submitted to Europe, it is problematic. 'We can't abolish the Budgetary process, we still have to go and prepare the budget, and we have to prepare estimates, and there has to be negotiations and so on. 'And there are very significant downside risks given what's happening and in terms of the tariff threat. 'Potentially, if we've got it resolved it could be an upside, we'll have to wait and see.' Advertisement He added: 'There are real issues in endeavouring to project into the future but we do have capital at our disposal. 'We do need to transform our infrastructure. 'We do need to put sufficiency of money aside for water and for housing and for energy.'
