‘Much more is needed’: cautious welcome from business leaders

Being too frugal at this stage is a mistake, warns top former finance mandarin John Moran

Taoiseach Micheál Martin. Business leaders have cautiously welcomed  stimulus package. Photograph: Niall Carson/PA

Taoiseach Micheál Martin. Business leaders have cautiously welcomed stimulus package. Photograph: Niall Carson/PA

 

Business leaders gave a generally cautious welcome to the Government’s stimulus package, which includes more than 50 measures designed to reboot economic activity, while some said the plan doesn’t go far enough.

The extension of the wage subsidy scheme was seen as positive although some commentators said more needed to be done to help the industries most affected by the Covid-19 pandemic.

Eoghan O’Mara Walsh, chief executive of the Irish Tourism Industry Confederation, said the staycation voucher initiative and the extension of the wage subsidy scheme were important first steps, but said “much more is needed”.

“Although the domestic market is important, it can never cover the lost earnings from overseas visitors. As many as 20,000 tourism and hospitality businesses are clinging on by their fingertips and they need wide-scale financial support to prevent significant job losses and business closures particularly in regional Ireland, ” he said.

“We are particularly disappointed that the tourism Vat rate was not cut to stimulate demand and put Ireland on a competitive footing with the UK and rest of Europe, ” Mr O’Mara Walsh said.

He also called for the quarantine policy on international arrivals to be “completely overhauled”, given the extent to which the Irish tourism industry relies on international visitors.

That sentiment was echoed by the Irish Hotels Federation (IHF) which called for an “immediate review” of the Government’s green list.

IHF president Elaina Fitzgerald Kane said the list was “overly restrictive by any measure and risks causing unnecessary further damage to the economy and our prospects for recovery”.

Small and medium businesses

Brian Keegan, director of public policy at Chartered Accountants Ireland said the package of measures throws a lifeline to small and medium businesses.

“It is evident that this new Government has been listening to business when putting the package together,” he said. However, while he welcomed have additional sources of funding for business, he stressed that grant aid “needs to play a strong role”.

But, John Moran, the chairman of SME Recovery Ireland and a former secretary general of the Department of Finance, said the measures “do not go far enough to prevent firms from folding”.

“A legacy of unpaid bills, liquidation sales and boarded up shop fronts in towns and villages across the country remains a real reality, while people dependent on unemployment payments face little hope of finding a new job,” he said.

“Being too frugal at this critical stage is a mistake; we must not be penny wise and pound foolish,” he said.

The Irish Homebuilders Association (IHBA), a body representing developers, welcomed alterations to the help to buy scheme and a temporary VAT reduction.

James Benson, a spokesman for the group, said the supply of new homes in the State is running well behind what was needed and average earners cannot afford homes.

“Based on the latest data available, backed up by what our members are seeing on the ground, it is likely that only 14,000 new homes will be completed in 2020,” he said.