Representatives of the hospitality and tourism trade across the country and people from family owned pubs and other small businesses took to the streets in Dublin on Tuesday of last week to make it clear to the Government and to all Irish politicians and the Finance Department that the 2025 Budget had added to their woes, even if it benefitted various others.
The President of the Restaurants’ Association of Ireland, Paul Lenehan made their position clear when he spoke outside the Dáil, describing how up to 270,000 people are employed in tourism and hospitality, and thousands of others are working in SMEs including family run pubs. He advised the Government that unless they reduced VAT demands and excise duty and gave them some relief and a chance to survive, they could not support them in the upcoming general election. Hundreds of restaurants, pubs and small hopspitality businesses had already been forced to close, he said.
Its easy to see why there’s such annoyance, because of the increasing costs of doing business, with the jump in VAT charges from 9% to 13.5%, only one of several increases in their costs. There’s also the increase in the minimum wage, in commercial rates, increased costs in energy and in raw materials. Broadcaster and former politician Ivan Yates, who acted as MC, cited a 36% increase in payroll taxes, the new living wage, statutory sick pay and a new auto-enrolment pension scheme, all affecting these family businesses as they try to keep going.
The Dublin protest was something of a last resort, organised by the Restaurants’ Association and the Vintners’ Federation (VFI) and joined by people from childcare facilities, from the hairdressers and beauty salon trade and other small businesses. Those taking part have all been feeling the pinch, especially since the VAT rate increased to 13.5% a year or so ago.
The Chief Executive of the VFI, Pat Crotty pointed out that the major drink suppliers were now dealing with 1,400 fewer pubs than they were three years ago, and he attributed this serious situation to the Government’s failure to take cognisance of their plight. The minimum wage went up by 36% in the past four years, he said.
Given the manner in which billions of euro were thrown around in the 2025 Budget two weeks ago, one can understand why a nationally known figure like Darina Allen of Ballymaloe House in Co. Cork would ask why the Government had failed to recognise the value of businesses that were the life and soul of rural Ireland, and allow them to be forced to close, when there was so much exchequer money available to help.
Will anything be done in response to these legitimate complaints from important sectors of the Irish economy that have kept going despite their worsening situation, but are now seen as “small fry” when what they generate in government revenue is compared to what global companies are presently providing? So do those in Government care if the Irish tourism and hospitality businesses are left without a future?
All attention before Budget ’25 was centred around the multi-billions generated by the multinationals, which are mostly US companies, and the extra 13 billions plus from Apple. A noted economist points out that 87 per cent of Ireland’s tax take in 2022 came from multinational corporation tax, and 55 per cent of all income tax also came from their higher paid employees, compared to just 14 per cent of the overall workforce. Then 54% of all VAT payments came from the same multinationals, so he estimated that a massive 62 per cent of Ireland’s total tax take has been coming from the multinationals, and that its probably even higher now.
Can this continue? Its questionable, because the US is aiming towards creating jobs at home, and bringing back companies from overseas. Meanwhile, the European Commission is aiming to expand its control, as it did when forcing Ireland to take the billions due from Apple, despite our reluctance.
Our economy is overly dependent on the multinationals, mostly from America, and if this situation changed, our massive tax payments could very easily be drastically diminished, and leave us in dire financial straits.
There were complaints in the Dáil from Independent Ireland Deputy Michael Collins from Cork, that the Finance Minister and Government were utterly out of touch with the realities for the small businesses who had been protesting, and he asked why their protests had been ignored. They were crushing all these small people, he said, who had seen their energy, labour and supply chain costs all sharply increased in the past two years.