#Budget2020 Case Studies: Donegal businessman calls for government to give clarity on Brexit spending

#Budget2020 Case Studies: Donegal businessman calls for government to give clarity on Brexit spending

A Donegal businessman has called for the Irish government to give clarity on how the Brexit funding will help border firms.

Finance Minister Paschal Donohoe said that €40m would be made available in the event of a no-deal Brexit on funding for the border and to help the tourism sector.

Brian McDermott, proprietor of the Foyle Hotel in Moville, said there will be major causalities in the border region and called for the government to release funding before it is too late.

The border trader also criticised the decision not to reduce VAT for the hospitality sector in Tuesday’s budget.

He said: “The budget saw no change to the 13.5% tax rate for the hospitality sector, which is probably the most frustrating and bad strategic move on behalf the government. It is hampering and killing off businesses in the border area.

“They need to change the VAT from 13.5% back to 9%. That was an incentive and it worked.

Brian McDermott, owner of the Foyle Hotel in Co Donegal (PA)
Brian McDermott, owner of the Foyle Hotel in Co Donegal (PA)

“Now we are facing unprecedented times and with the sterling so low it’s left Donegal not being the most natural escape, especially people for Northern Ireland as they don’t have a fair exchange rate, plus the insecurity of Brexit has damaged consumer confidence.

“We have been trying to showcase the area, from our very strong message on food to selling the story of buying into the local economy.

“Less than two years ago there was a favourable VAT rate and Donegal was hopping in terms of immediate and frequent breaks, but Brexit has knocked consumer confidence.

“The budget will not do us any favours.”

The chef said that he and his staff are working “tirelessly” to keep the doors open.

“We are talking open survival, not profit,” he added.

“The contingency plans sounds like a cheap softener. I have previously heard that there would be more money but it need to go to border areas as it’s a border issue and industry problem.

“As an operator, I will be watching to see where this is being made available.

“There is going to be causalities and there is no celebration, and central Dublin does not get how severe it is.”

Oyster farmer and owner of Killowen Shellfish Darren Cunningham said the threat of Brexit has stalled investing more money in his business.

Darren, who works at Carlingford Lough, has been an oyster farmer for ten years.

“As someone who works on the border I cannot forward-plan, I just hope for the best,” he said.

“I would have invested three or four times more had it not been for the threat of Brexit. I cannot throw money at something that I don’t know whether it will work.

“I think the Irish government has done everything it can to address the fears people have about Brexit.

“I think tariffs will be bad – we are shipping out live oysters which are picked up by a southern company on a Friday and by midday Sunday it will reach our customers.

“The oysters are alive and in good condition so we are very worried about delays. It’s my biggest fear as they are living creatures.”

Darren, whose business is north of the border, said he does not expect the same Brexit contingency funding from the UK Government.

“No-one knows what will happen because no-one can give us an answer,” he added.

“I wouldn’t imagine they (UK Government) will do anything like that as Stormont isn’t up and running. It’s a mess and there’s no getting round it.”

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Changes to medical card threshold have not gone far enough, says pensioner

Grainne Kenny
Grainne Kenny
A pensioner has claimed that the Government’s changes to the medical card threshold have not gone far enough and has disputed the number of people who are set to benefit.Finance Minister Paschal Donohoe announced in his Budget on Tuesday that the threshold for medical card income for people over the age of 70 will increase by €50 for one person or €150 for a couple.It was claimed that it will benefit up to 56,000 people.Pensioner Grainne Kenny, however, has challenged that claim, saying the changes to the living alone allowance will push more people outside the threshold.The living alone allowance will increase by €5 while fuel allowance is set to jump by €2 a week.There is no extra €5 for pensioners, despite calls from charities to raise the state pension by €7.Ms Kenny, who lives in Dun Laoghaire, had to fight for her medical card after she was diagnosed with glaucoma.The mother of three, who is in her eighties, also suffers from arthritis and respiratory issues.“Medical cards are a lifeline and we cannot rise to the challenge of private healthcare,” she said.

In 2013, the threshold was around €700 but then in 2018 it was reduced to €500.

The least I would expect is the Government to revert it back to the €700 gross income. Paschal hasn’t done us any favours.

“I don’t understand where they get the figure of 56,000 people who will benefit from it – the minister should produce those figures. I don’t believe that’s the truth and it should be challenged.“People who are on two pensions who fall inside the bracket of medical cards are pushed back out of it if they are living alone because of the increase to living alone allowance.“I welcome the reduction of the prescription charges as I get a lot of medication.”Among the Budget changes was the announcement that there will be one million additional home care hours provided next year.
Don Smyth (Liam McBurney/PA)
Don Smyth (Liam McBurney/PA)

Don Smyth, a father of one who lives in Ranelagh, welcomed the increase as he has been fighting for home care for more than two years.The 82-year-old, who uses the services of charity Alone, said it will be a great advantage.“I asked for home care for two hours a week and was refused and have been refused three times since then,” he said.“I have been told to keep trying but it’s about time I get help.”He also welcomed the reduction in prescription charges as he takes around 10 drugs a day.He added: “The prescription charges are down 50 cents so that will help me and I am pleased to see the threshold increase for over-70s who can now get access to a medical card.“I am happy to hear that I will get a Christmas bonus and I also welcome the living alone allowance will increase by €5 and fuel allowance will go up by €2 a week, but that’s hardly noticeable.“Overall, it’s a sensible Budget.”

Child poverty will continue to rise despite budget increase, single parent says

The challenges faced by single parents will not be remedied by an extra €15 per week, it has been claimed.Minister for Finance Paschal Donohoe announced on Tuesday that the social welfare package allocated by the government will increase by €690m next year.The Living Alone allowance will increase by €5 and the One Parent Family payment will go up by €15, which restore the credit back to 2012 levels.
Single parent, Leah Speight, gives her reaction to Tuesday's Budget. Picture: Niall Carson/PA Wire
Single parent, Leah Speight, gives her reaction to Tuesday's Budget. Picture: Niall Carson/PA Wire
However, mother-of-one Leah Speight, 41, from Dublin, says the €15, although welcome, does not go far enough.

€15 to reverse what was done is mealy-mouthed and nothing that I can see that could dramatically improve working family parents trying to get back to work

“We’re talking about the budget for 2020, eight years since the budget that cut everything, and particularly hurt single parents,” she said.“Of the recommendations that were given to the minister’s own committee, and proposals made by Barnardo’s, one was to extend the Jobseekers Transition payment up to 18, or reduce the working family payment from 19 hours to 15 hours, none of these were considered.“€15 to reverse what was done is mealy-mouthed and nothing that I can see that could dramatically improve working family parents trying to get back to work.“If someone’s youngest child is aged 14, they’re excluded from those payments, and research shows that teenagers are the group most at risk of poverty, anyone with a child over the age of 14 won’t receive any benefit.“Time and time again, it grabs the attention of the media, €15 looks good, but if you look at the detail, I’m not saying I don’t welcome it, but there are specific areas they should be looking at to avoid further child poverty.”In 2016, there were 218,817 family units with children headed by a lone parent, an increase of more than 3,500 families since 2011.The new National Childcare Scheme has also come under fire from lone parents; the loss of targeted schemes like the Childcare Employment and Training Support (CETS) scheme, which meant lone parents in higher education or skills training courses could qualify for a subsidised childcare place, has been deemed a severe loss.
Lynn Ruane felt the budget did not offer much help for single parents (Niall Carson/PA)
Lynn Ruane felt the budget did not offer much help for single parents (Niall Carson/PA)

The scheme is income-based and does not incorporate a needs assessment, meaning that a couple will receive the same subsidy as a lone parent on the same income.“This just offers consistent poverty traps, I’m so disappointed to see the budget today, to see no change to the National Childcare Scheme, knowing that lone parents are going to be excluded seems bizarre and counter-productive,” Ms Speight added.Senator Lynn Ruane, likewise, felt the budget did not offer much help for lone parents.“A two or €3 increase dependent on the age of your children, there’s nothing in there in terms of really supporting families,” she said.

“I’m really underwhelmed by the education spend too, if you look at capitation grants, there’s no increase there either, parents will still end up footing the burden through voluntary contributions if capitation is not increased, so that’s another example of parents not being considered in the budget.”

The Capitation Grant is paid to primary and voluntary secondary schools and is based on the number of recognised pupils enrolled in the school.

Hospitality VAT rates driving staff off the books, hairdressers claim

The current VAT rate on hospitality is driving hairdressing staff off the books and harming the industry, it has been claimed.

Hairdresser Jenni Crawford at the Kazumi hair salon in Dublin. Photo: Niall Carson/PA Wire
Hairdresser Jenni Crawford at the Kazumi hair salon in Dublin. Photo: Niall Carson/PA Wire

Today's Budget for 2020, announced by Finance Minister Paschal Donohoe, saw no change to the 13.5% tax rate for the hospitality sector despite campaigning from a number of industry bodies to have the rate lowered as the spectre of a no-deal Brexit and subsequent recession looms large.

The tax was cut to 9% to stimulate the tourism industry in 2012 but later restored to pre-recession levels as part of Budget 2019.

Hairdressers remain listed in the hospitality sector, despite campaigning for a change, stating that the apprenticeship and training required for the role designates that it is a skilled practice.

Jenni Crawford, an award-winning hairstylist from Kazumi salon in Dublin city, says the industry is feeling let down.

“It brings us back to the situation where we’re seeing a knock-on effect, clients are taking on less treatments, purchasing less in the salon, and then eventually turning to home hairdressing,” she said.

“Which in turn leads to more hairdressers saying to themselves, ‘why would I pay this VAT rate when I can do this off the books, and deliver a service to someone’s home, cheaper for the customer and the hairdresser’?

“I think the government should’ve held back, we were only getting back on our feet, people are a lot more aware of what’s in their purse, we all spend differently, but people were adjusting to life after recession, comfortable coming back to the hairdressers, when the price shot up again with the VAT.

Now more bills are going up, higher carbon taxes, parking is going up, diesel is going up, going to the hairdressers is always the first to be cut out, or leads to hairdressers going off the books or cutting corners.

“In Dublin city, you could be talking €16 parking while you’re in getting your hair done and prices increased due to the VAT, and people start thinking they can’t afford it.

“With Brexit, an awful lot of our product comes from distributors in the UK, so the price of that is going to go up too, we have to be very careful about what and how we buy now.

“We should never have been listed in the service industry, it’s a four-year-long apprenticeship, we spoke to the government in 2008 about changing our status, but you feel like these rates and laws are made without speaking to the people involved.

“The vast majority of hairdressers in Ireland are small businesses, independently owned, and these are the people who need a hand-up.

“In rural Ireland, with more taxes, less money, the small main street salon, which can be the heart of the community, will suffer.

“Any instance where people feel like they have less money in their pocket, going to the hairdressers is always first to go.”

Restaurant Association chief executive Adrian Cummins told Newstalk Radio that the hospitality rate should have been changed.

“We are the most uncompetitive country in Europe to do business in and the government haven’t addressed that,” he said.

“Specifically in our industry, there seems to be an attitude that everything is going well – but it isn’t.

“We are finding it very difficult to survive in businesses.”

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