Minister for Transport and Tourism Paschal Donohoe has warned the tourist industry against a return to “any perception of rip-off Ireland”.
He said the retention of the special 9 per cent value added tax (VAT) rate for the sector in the upcoming budget was conditional on not seeing a return to price increases that caused damage to Ireland’s brand.
“We can’t get back to any perception of rip-off Ireland for international or domestic tourists.
“When we got to this point in the performance of our tourism sector a number of years ago, really big mistakes were made in not offering good value to people who were in our country.
“Our hotels, our restaurants and our cafes got too expensive for a while and it caused gigantic damage to Irish tourism. That mistake cannot be made again.”
Speaking in Clontarf, Dublin, Mr Donohoe said he kept the matter under continual review.“That’s why I’m always clear that the retention of the 9 per cent VAT rate is conditional on not seeing a return to the kind of behaviour that caused such damage in the past.”
Mr Donohoe said he would like to see the rate retained in the upcoming budget but the final decision would be taken by Minister for Finance Michael Noonan.
Meanwhile, Mr Donohoe said the money the Government gets from selling its stake in Aer Lingus will be used to fund infrastructure projects across the State. He said the Coalition would “lend out” €335 million in funding to initiatives aimed at improving access.
His comments followed shareholder approval for the acquisition of Aer Lingus by International Airlines Group (IAG). The sale of the State’s 25 per cent stake in Aer Lingus to IAG was recommended by the Cabinet in May.
Asked if the money had been earmarked for particular projects, he said: “In relation to the funding that the State will receive through disposing of our share, under the rules that we’re all now part of by being members of the euro zone we have to use that funding in particular ways.
The Minister was reviewing progress of the construction of a 2km cycleway and pedestrian promenade between Sutton and Clontarf. Improved flood defence will be delivered as part of the project. This will include repairs to the sea walls and new retaining wall construction at the northern and southern end of the scheme.
Dublin City Council is responsible for the overall project management as well as funding the flood defence.