Hospitality and retail 'will need many millions in public supports for years to come'     

Employment Wage Subsidy Scheme has cost the exchequer over €2.7bn since its launch last summer

Hospitality, tourism, and retail business leaders are focusing on a lengthy extension of the reduced rate 9% Vat rate and want the Employment Wage Subsidy Scheme to go on well beyond its planned expiry date at the end of June. Picture: Larry Cummins

Business groups are anticipating the Government will need to spend many millions over multiple years to help save jobs in the worst-hit parts of the economy.

Hospitality, tourism, and retail business leaders are focusing on a lengthy extension of the reduced rate 9% Vat rate and want the Employment Wage Subsidy Scheme (EWSS) to go on well beyond its planned expiry date at the end of June.

Retaining the EWSS and Vat at 9% are highly costly measures that run into many millions for the exchequer, but the business groups say the measures will pay for themselves by helping to offset long-term unemployment.

Revenue figures show there were 309,000 people availing of subsidised wages scheme at a monthly cost of €400m in March, little changed from the previous months of the current lockdown. 

EWSS has so far cost the exchequer over €2.7bn since the scheme was launched last summer, when it was refashioned from the former temporary scheme.

Both Finance Minister Paschal Donohoe and Expenditure Minister Michael McGrath have pledged that income support schemes will be extended beyond June, but have not elaborated. 

Of the 421,000 needing the pandemic unemployment payment this week, the largest groups were accommodation and food service, at 102,405, and 68,000 workers from wholesale and retail, the latest figures from the Department of Social Protection show. 

Adrian Cummins, chief executive of the Restaurants Association of Ireland, said the EWSS needs “to be in play for the foreseeable future". 

The reduced Vat hospitality rate of 9% should stay through to the end of 2024 and, he said, there will be a need for the write-off of commercial rates through this year for all hospitality businesses.  

Restaurants will need the Government to forgo €30m of “ancillary costs”, while the annual capital spend to promote outdoor dining will need to climb to as much as €45m, Mr Cummins said. 

Tim Fenn, chief executive at the Irish Hotels Federation, said businesses again face “massive costs” in reopening this summer and said the EWSS, the hospitality Vat rate, and waiving local authority commercial rates were key for hotels.

Publicans want access to finance, outside of the main banks, at very low rates for 10 years and “a substantial restart grant prior to opening,” the Vintners’ Federation of Ireland said.

Retailers may need as much as €80m this year to help its recovery, according to senior economist Jim Power. Commercial rates and deferred tax and interest bills will need to be covered, Mr Power said. 

Industry group Retail Excellence wants a rescue package to cover a “lengthy” extension of the rates waiver, the reintroduction of “significant” restart and online grants, and an arbitration plan for commercial rents, at an additional cost of €40m this year. 

“A comprehensive rescue package on rents, grants, and waivers is a pre-requisite for businesses that have suffered numerous body-blows since March last year,” said Retail Excellence managing director Duncan Graham.