Job cuts warning after commercial rates rise 3.3%

BUSINESS leaders in Dublin have warned there will be job cuts after the city council voted through stiff increases in commercial rates for companies and shops.

Businesses were already doing their best to stay afloat by fighting price increases and falling incomes, said the Dublin Chamber of Commerce last night.

But the capital’s commercial representatives criticised the latest decision by councillors to increase rates by 3.3%, insisting it would add to the burden facing companies, and could ultimately hit employees.

“Commercial rates are a large component of a company’s cost base. Dublin City Council must appreciate that at a time of falling revenues and reduced profitability for businesses, they cannot afford such tax increases,” said Gina Quin, Dublin Chamber chief executive.

A draft of Dublin City’s 2009 budget was agreed on Monday night. Included in proposals are plans to reduce capital spending on large infrastructure projects over the next three years by as much as €330 million.

A rise of 3.3% next year was also agreed on commercial rates paid by businesses to Dublin City, which, according to the council, is expected to bring in an extra €19m.

Councillors narrowly voted to accept the draft budget, which was mainly backed by Fianna Fáil and Labour. Councillors from other parties opposed the rate hike, arguing that the Government had already reduced its central funding by over €7m.

The extra commercial charges have angered the business community.

“Dublin City Council should not be leaning on the business community to balance their books in 2009,” argued Ms Quin.

The business representatives instead suggested that the Government should scrap rate exemptions for state-occupied buildings which would raise another €30m for Dublin City Council alone.

IBEC members were also furious over the move.

“Retail sales have fallen significantly in the year to date. The last thing the hard-pressed retail sector needs is a further increase in its cost base,” contended director Torlach Denihan of Retail Ireland, the IBEC group that represents the Irish retail sector.

“The members of Dublin City Council should at a minimum have frozen rates. It is to be hoped that other local authorities will not repeat Dublin’s mistake,” advised Mr Denihan.