Retailers bank on budget scrap

Scrappage scheme for washing machines mooted

Furious lobbying is taking place behind the scenes in an attempt to convince Minister for Finance Michael Noonan to add a little retail therapy to this month's budget.

The industry has been hit hard by the downturn, with shoppers still fretting over big- ticket purchases. A tsunami of water charges, property taxes and other fiscal nasties tends to have that effect on consumer confidence.

A key budget recommendation of the Retail Consultation Forum, which brings together State and industry groups, is for a white-goods scrappage scheme. Customers would get a VAT-driven incentive to trade in their old washing machines and dishwashers and so on for new, more energy-efficient ones.

Retail Excellence Ireland (REI), a forum member and vocal lobbying group representing 11,500 shops, has in recent weeks been bending the ears of top-level officials at meetings in the departments of energy, the environment and finance. It has also hit upon a timely pitch for the scheme that may catch the ear of politicians: reducing the burden of water charges.


Washing machines use upwards of 12,000 litres of water a year, at the average rate of 220 uses a year calculated by REI’s consultants.

Top energy-rated A+++ machines, which last year accounted for a quarter of the 131,000 washing machines sold in the Republic, use less water and electricity than lower-graded guzzlers. Half of new machine are lower-efficiency A grades, REI says.

The retail industry says such a scrappage scheme would cost the State €15 million up front. But when people buy one new white good, it argues, they usually buy another at the same time: a new dryer to go with the new washer, etc.

REI is trying to convince officials that VAT on these extra purchases will make up the VAT shortfall. It could be a cheap way for Noonan to signal he is cognizant of the weight of water and energy charges on hard-pressed families.