Tourism pleads crisis conditions merit financial assistance

Unexpected and unusual events this year mean the Minister for Finance, Mr McCreevy, is under extra pressure to help the tourism sector in Budget 2002.

Among other demands on the Minister are to find resources to meet a commitment to increase childcare benefit, the need to provide more childcare facilities and to make workplaces more family-friendly.

The Irish Tourism Industry Confederation says the sector is facing a unique crisis with loss of business because of the foot-and-mouth disease followed by a sharp drop in US tourists after the September 11th terrorist attacks. In the Budget it wants "a statement of intent" from Mr McCreevy that he will set up a special recovery fund to help rebuild its market position. It is seeking increases in the marketing funds available to small and medium sized companies and to niche tourist businesses. It also wants some tax relief measures to help companies in the sector contain costs and improve competitiveness.

Among the tax measures the ITIC hopes to see tomorrow are the extension of capital allowances to registered guesthouses and staff accommodation and the elimination of the 2 per cent levy on car-rental insurance premiums.

The confederation wants Mr McCreevy to reduce the VAT rate from 12.5 per cent to 10 per cent. It is also seeking a change in the system so that VAT on hotel and restaurant business expenditures can be allowed as VAT inputs to registered businesses as well as an increase in the income threshold for liability for VAT to £30,000 (€38,092) for town and country homes and farm houses. The ITIC has joined with employers organisation IBEC to press for reductions in employers' PRSI.

The Irish Hotels Federation which represents 900 hotels and guesthouses wants Mr McCreevy to set up a £20 million special tourism recovery fund to support specific projects including focused marketing programmes and advertising support for low-cost airlines introducing new routes into Ireland.

Citing the ongoing effects of foot-and-mouth disease and the September 11th terrorist attack on US tourist numbers the IHF has urged Mr McCreevy to use Budget 2002 to spearhead a recovery in tourism.

Chief executive Mr John Power says that only about 300,000 US tourists will have visited Ireland in 2001 compared with a normal market of about 600,000. The 2001 fall-off means a loss of about £200 million to the Irish economy and the US tourist market is not expected to recover for two to three years.

"We want the Government to acknowledge our difficulties and take action to redress the situation," he said. The £20 million fund could be used to sell Irish holidays to other markets such as the UK and mainland Europe and in the domestic market to replace the lost US tourists, he says.

In addition the IHF wants Mr McCreevy to support a local authority rates rebate programme similar to that used in Northern Ireland in the first quarter of 2001 to help businesses hit by the foot-and-mouth disease - where they could show a 15 per cent drop in turnover they got a 25 per cent rates rebate.

The IHF wants anomalies in the VAT system corrected which it says put Irish hotels and conference centres at a competitive disadvantage.

On childcare, the National Women's Council of Ireland wants Mr McCreevy to introduce paid parental leave involving social insurance payments and five days paid paternity leave for fathers.

It has called for an increase of £25 per week in child benefit in Budget 2002 to address child poverty and to provide a subsidy for the costs of childcare - the current level of child benefit is £67.50 per month per child for the first two children and £86 per month for each subsequent child.