Budget 2019 does a little for a lot, but the opportunity has been lost to deliver adequate targeted supports for the largest private industry employer in Ireland — retail.
The reduction in the USC, the increase in tax bands, the increase in welfare payments, and the restoration of the Christmas bonus represents an ambitious plan to put money back in peoples’ pockets and get them spending again. This is no bad thing, as it will lead to increased consumer spending, but where it will go is crucial.
Online purchasing has reached dizzying heights, with over €21m being spent every day by Irish consumers. With two-thirds being fulfilled by distance sellers, the foregoing measures are a double-edged sword for Irish retail and ultimately the exchequer.
Retail Excellence budgetary proposal to ensure greater tax fairness for Irish retailers by making online marketplaces jointly and severally liable for the collection of VAT and duties on imports has fallen on deaf ears. Currently, Revenue is tasked with collecting this but with such huge numbers of parcels, it is physically impossible for them to intercept all. This is a missed opportunity given the extra funds it could have generated.
That said, we are delighted to see double the investment in the Online Retail Scheme to €1.25m to support the digital online capability of retailers in Ireland. It is a step in the right direction.
The failure to retain the 9% VAT rate is a disappointment to those fearful of what Brexit will actually look and feel like, exacerbated with no town renewal investment measures announced. The increase in the national minimum wage and employer’s PRSI will also have a negative impact on retailers. On the other hand, the allocation of funding of €950m for the Department of Business, Enterprise, and Innovation gives our industry hope.
The introduction of a €300m affordable housing scheme is a critical move for retail staff who are finding it difficult to find available homes. The recruitment of an extra 800 gardaí is crucial in retailers’ fight against crime and the Earned Income Credit being increased to €1,350 for self-employed workers is a positive move. Budget 2019 is all things to all people and aims to instil hope in most.