Hospitality sector critical of budget as failing to sufficiently help rank-and-file firms

Many businesses could now be forced to close through a lack of supports, the Restaurants Association of Ireland (RAI) said after Budget 2024 was unveiled. It said the Government failed to sufficiently help small and medium-sized hospitality.

The representative body said the Government had not taken the industry’s views into account, notably regarding a return of a 9 per cent VAT rate.

“The hospitality and food-led sector has time and time again warned the Government that, by increasing the VAT rate for our industry to 13.5 per cent, it will be issuing a death warrant to many businesses,” said RAI chief executive Adrian Cummins. “It has also failed to take meaningful action to support food-led businesses with the exorbitant energy costs they continue to face.”

Packaged supports

It criticised the lack of a “meaningful” replacement for the Temporary Business Energy Support Scheme.

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The association had also lamented a lack of packaged supports for those businesses struggling in areas experiencing large reductions in footfall and tourism due to the accommodation of refugees.

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As with other businesses, concerns were also expressed regarding an increase in the minimum wage and paid sick leave entitlements, as well as the planned rollout of the pension auto-enrolment scheme.

“The Government instead delivered piecemeal that will not be enough to keep many small and medium-sized businesses open,” said the association in a stinging rebuke of Tuesday’s announcements.

Excise duty

Separately, the Drinks Industry Group of Ireland said pubs and the sector in general were disappointed at the Government’s failure to include a reduction in excise duty on alcohol.

The group’s chairwoman Kathryn D’Arcy said a combination of rising costs, the recent VAT rise and the second-highest excise duties in Europe, left the sector in need of a renewed policy focus.

“Regrettably, Budget 2024 has failed to grasp this,” said Ms D’Arcy. “We put forward a costed, stepped plan which would reduce excise rates over the next two years, serving to underpin a sector which is a major employer and contributor to the social fabric of every town and village.”