Groups representing the commercial sector have condemned a move by Dublin City Council (DCC) to increase commercial rates and to cut capital spending as part of its budget for 2009.
Last night, councillors voted by 28 to 22 votes to support the budget. Lord mayor Eibhlin Byrne (FF) had warned of the consequences of voting against the budget, saying it was the best that could be presented in the current economic climate.
But Fine Gael - apart from Bill Tormey - and Sinn Féin said they voted against the budget because of the almost 7 per cent reduction in the Local Government Fund from the Department of the Environment and the increase of 3.3 per cent in commercial rates.
Retail Ireland, the Ibec group that represents the Irish retail sector, said the decision to increase commercial rates would make the market "less competitive" and would put employment under pressure.
Torlach Denihan, director of Retail Ireland said “The decision by the members of Dublin City Council to vote to increase commercial rates by 3.3 per cent is quite frankly incredible. 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."
The Construction Industry Federation (CIF) strongly criticised a cut to capital spending of €330 million over the next three years.
Speaking for the Dublin branch of the CIF, Martin Whelan described the decision as a “retrograde step for the communities affected and one that will inevitably lead to job losses amongst contracting companies within the city”.
He said: “A number of badly needed infrastructure projects will be affected, including the regeneration of Cork Street and improvement projects in Rialto, Inchicore and Smithfield. This is a huge blow to Dublin-based contracting companies which are already experiencing severe difficulties because of the sharp reduction in the number of public and private infrastructure projects.”
“Many contracting companies have been forced to let workers go and more job losses will result from this decision”.
The Small Firms’ Association (SFA) also called for the rates decision to be repealed.
SFA director Patricia Callan said it was “unacceptable” that national exchequer cuts in current spending “have resulted in stealth taxes, such as increased licence fees and permit charges and are now resulting in higher local authority charges on small businesses”.
“Local authorities cannot be allowed to sort out their own financing issues by levying additional charges on the small business community,” Ms Callan said. She also called for the "grossly inflated cost and inefficient delivery of local authority services" to be tackled.
The Irish Hotels' Federation (IHF) condemned the rates increase as outrageous and indefensible in the economic climate. It called on the Government to consider an embargo on all increases in rates and local authority charges.
Matthew Ryan, IHF president, said: "The move by Dublin City Council is extremely short sighted and jeopardises the long term well being of the economy. The move sets a dangerous precedent with wider implications throughout the country as other local authorities will now attempt to follow suit and increase rates."