When Minister for Finance Paschal Donohue stands in front of the Dáil next Tuesday, he will seek to deliver a budget that both predicts and prepares for, the most unpredictable period in the history of the Irish economy. Rarely, has a budget been delivered in a time of such great uncertainty.
Budget 2021 will be delivered against the backdrop of the UK’s impending departure from the European Union on January 1 with no deal in place, and a pandemic that has consistently forced closure or partial closure on businesses across the region with no end-date in sight.
Every business in the country has been impacted by Covid-19, but it goes without saying that some have been hit harder than others.
The latest survey from Fáilte Ireland, which surveyed restaurants, hotels, pubs, venues, and others in the hospitality, tourism, and entertainment sectors, found that two out of five have not reopened in any capacity since the pandemic hit.
More than half of those who have opened are operating at less than 50% of their capacity.
The Minister for Finance @Paschald, and The Minister for Public Expenditure and Reform @mmcgrathtd, will present Budget 2021 to the Dáil on Tuesday the 13th October 2020 #Budget21 pic.twitter.com/mCkGA60zEo— Department of Finance (@IRLDeptFinance) September 7, 2020
For restauranteurs and hoteliers, trading capacity has been greatly reduced due to restrictions on capacity, opening hours, and the sale of alcohol. The sector is also suffering from a lack of tourists due to travel restrictions and the ongoing threat of closure or partial-closure in Levels 3, 4, and 5 of the Government’s ‘Living with COVID-19’ plan.
It was hoped the ‘Stay and Spend’ initiative might encourage travel within the country, but the latest survey from the Irish Hotels Federation showed total room occupancy rates across the country at 22% for October and 11% for November, compared with rates of 81% last October and 82% last November.
This was prior to the introduction of Level 3 nationwide from today, which dictates individuals stay within their own county unless they're travelling for work, education, or other essential purposes.
The IHF has estimated 100,000 tourism jobs have been lost so far this year, with a further 100,000 jobs at immediate risk.
At Shannon Airport, passenger numbers have declined dramatically since scheduled services recommenced in July. August saw numbers down 86% while September saw them dip even further to 91%. Cork Airport has warned the airport is facing operating losses of over €20m as a result of the coronavirus pandemic, while Ryanair has repeatedly threatened to shut its bases at both Cork and Shannon if the Government fails to roll back its 14-day quarantine rule and adopt the European Commission’s proposed traffic light system.
But perhaps the biggest hit has been taken by the many thousands of individuals who work in the live entertainment and events industry. Even in Level 1, the lowest level of restrictions in the Government’s plan, many live events would remain commercially unviable and nightclubs, casinos, and discos are mandated shut.
The Event Production Industry Covid-19 Working Group (EPIC) has said the vast majority of the 35,000 plus people that work in the nation’s theatres, venues, clubs, festivals, and events industries haven’t had any employment since March 12 of this year.
Hoteliers, restauranteurs, and those in the entertainment and aviation sectors have endured harsh restrictions and regulations for the greater good. These were the industries that were the first to close, and they remain NPHET’s first targets when it comes to re-introducing restrictions and imposing lockdowns. It is likely they will be the last to recover.
As the country grapples with a move to Level 3, those in the hospitality, entertainment, and aviation industries expect a ‘stop-start’ model of business to dominate the coming months.
It’s no exaggeration to say extensions and/or increases to the wage subsidy schemes, local authority waivers, reductions in vat, and other measures in this year's Budget could very well determine the survival of many hotels, restaurants, pubs, venues, and airports in the region.
It’s been a long time since the Finance Minister has been tasked with a Budget as complex and challenging as this one, and for those whom this year's budget could act as a buoy, it may be the difference between staying afloat and sinking.