I welcome the Minister, Deputy McConalogue, to the House. It is always great to have the senior line Minister from the Department
Nithe i dtosach suíonna - Commencement Matters
Animal Welfare
Cuirim fáilte roimh an Aire. I welcome the Minister and my friend. I thank him for taking direct responsibility for dealing with a Commencement matter; he is setting a good example there. On 4 January what I would regard as a mysterious consultation appeared on the website of the Department of agriculture. I felt it was artfully hidden under seven statutory notices on dog ear-cropping regulations. It was the only item not headlined at the top of the page. It seemed as though people were not meant to notice it.
That consultation being announced is on a hot topic in the animal welfare world, the proposed banning of e-collars, the training of dogs with electronic collars. The primary use of those collars is to stop dogs attacking sheep, events which are terrifying for the sheep and highly disruptive. Anybody who knows sheep farmers or have had the experience of coming across sheep savaged to death by stray dogs knows it does nobody any good at all. It is not great for the dogs either because when they are caught, they tend to get shot by farmers or put down by vets. This is happening almost daily the length and breadth of this island - Limerick, Offaly, Tipperary, Derry and Galway all had appalling attacks recently. I saw a representative of the IFA talking about the expected problems during the lambing season just starting.
Many breeds, ranging from greyhounds to German shepherds, have a strong predatory drive to chase after animals like sheep. Given that they can smell their prey vastly better than we can and they can run faster than us, there are two options if we are serious about stopping the appalling epidemic of attacks. We could keep dogs permanently on leads. That is easier said than done with big dogs especially when their owners are becoming frail. It is also no life for a dog to be kept permanently on a lead. That leads us to the need to train dogs to avoid their normal predatory targets. Electronic collar training is one form. It gets the dog to permanently associate a startle with its predatory target. It is a Pavlovian response and according to most scientific research, it is the most effective way.
My concern about this proposed consultation is that it seems to follow a direction of travel that it is proposed to have a ban on the use of these electronic collars. I am not talking, of course, about perimeter fencing or anti-bark; that does not seem to be covered. However, the fact that the consultation was so unnoticeable and a very fast three-week consultation period made me suspicious - not of the Minister, but of the Department.
I believe that these electronic collars used properly are humane, do not compromise animal welfare and are the most effective way to deal with the issue, and I believe the science backs that up. It is the most effective way of stopping sheep from getting savaged and dogs from getting shot.
I spoke to the deputy president of the Irish Natura and Hill Farmers Association recently. He described a horrible scenario where even friendly dogs off-lead thinking that they are playing can chase sheep and terrify the poor creatures. There was a story about sheep that were cowering on a rock in the coastal area and eventually jumped to their deaths in their terror. Those who claim that the banning of such e-collars is about animal welfare need to think twice. The welfare of the animals that need to be saved from predatory dogs is one thing. The welfare of the dogs that end up getting shot or are kept chained up is another argument.
The alternative approach to training dogs proposed by some is to use reward-only training which uses biscuits and praise to induce better behaviour from the dog. That might sound nice in theory but it does not work in practice. Wales for example banned e-collars in 2010. Insurance data showed that there are four times more dog attacks on livestock in Wales than in comparable parts of the UK and three times more dogs being shot as a result. I think it is a no-brainer.
First, I ask the Minister to extend this consultation period which is due to end this Friday. Second, I ask him to ensure that there is an evidence-based approach to this issue and that there is proper consultation with the scientific community, farmers, dog owners and all other interested and informed parties.
I thank Senator Mullen for submitting the Commencement matter this morning. I have no problem extending the date. We want to receive submissions on the matter and we want to be open. It is not particularly time-sensitive but is something we want to conclude in a timely fashion. I will ask the officials to ensure it is widely advertised. I certainly want people to be aware of it and today's debate will help ensure people are aware of it. I will give extra time and ensure it is prominently highlighted. We want to ensure people get the opportunity to participate in this and give their views on this important issue.
The consultation relates to the use of electronic shock collars for the purpose of training. It does not relate to enclosing animals in a garden or anti-bark measures. The consultation on this will be important. The Senator spoke about research that indicated that electronic shock collars are an effective way of training. I have no doubt that they are. If we were to put a collar on a person and shock them every time we wanted to deliver a message, it would be a pretty effective way of getting their attention and getting a result, but it would be very cruel.
If you are to put a collar on a dog and shock it every time you want to get its attention or get a desired outcome, it might be effective but it is cruel too.
Regarding the consultation, we will get everybody’s views on this and consult broadly. I want to be clear that we are not talking about boundaries around gardens whereby it keeps a dog or animal safe and the animal stays away from it or in anti-bark cases with animals living in a community, rather, it is related to a shock collar for the purposes of training. That is what the consultation is about.
Under the Animal Health and Welfare Act 2013, a person is prohibited from causing unnecessary pain or suffering or endangering the health and welfare of any animal. The Act also provides that a person having possession of an animal must ensure that the animal is kept in a manner that safeguards its health and welfare. All legislation under the remit of my Department is kept under constant review, including legislation to ensure the health and welfare of canines.
We have seen in recent times significant changes at European level in respect of remotely controlled electronic shock collars in dogs and cats. We have seen them banned in a number of countries, including, for example, the Netherlands, Austria, German and Wales, while proposed bans in France and England are currently undergoing the relevant legislative processes and considerations. We have also recently seen that the Scottish Government published guidance advising against the use of these collars. In addition, the European Commission has recently published a draft proposal for a regulation on the welfare of dogs and cats and their traceability that includes a provision that would prohibit using these collars to expose dogs and cats to an electric current in pet stores, shelters and breeding establishments within the EU.
Everybody is encouraged to contribute to the consultation. The email address for submissions is animalwelfare@agriculture.gov.ie. The deadline was to be 26 January but I will extend it by two or three weeks. I will talk to the team. We want people to engage and give their views on this. I urge those with an interest in this to take part in the consultation, and myself as Minister, working with my team, will fully reflect on those for the way forward.
I thank the Minister for his response, and the deadline extension is very welcome. I am a dog owner. I have no vested interest because I have a loveable but cowardly collie who does not need any such collar for training.
However, as to the question of whether it is a shock, scientists say that this is more like a pulse. I think the Minister is conceding the principle if he is not proposing to ban the perimeter fence restriction, which is the same level of minor shock of approximately 5 mJ. It is surely the case then that there cannot be an argument for calling this a shock. As I said, I am quoting the University of Lincoln, which describes it as a pulse, stimulus or startle. It also does not have to be continuous. In fact, the dog learns very quickly. Let us remember that we are talking about saving animals’ lives and protecting animal welfare and, therefore, the balance of compassion actually lies on allowing this very low pulse, which is something like the pulse of a bicycle lamp, to be used in training. Calling it a shock, I suspect, is somewhat propagandistic. The Minister is conceding the principle. I got stung many a time by an electric fence at home. There is 3,000 times less of a startle involved in this perimeter fencing, the banning of which is not being proposed. If it is the very same startle that is involved in the context of reputable dog trainers using it, I do not see what the argument can be.
In any event, let the science speak. The Minister is doing so and taking an important first step in extending the consultation period. I also ask that whatever the consultation shows, the Department makes sure that it collates all the scientific evidence. In New Zealand, for example, the Department of Conservation requires the use of these e-collars in training animals. Why? To protect kiwis from being attacked. In Wales there have been three times more dogs killed and four times more attacks since they banned it, compared with areas in the UK. Therefore, there has to be careful thinking about where the compassion and animal welfare lies on this issue.
I thank the Minister for the commitment to extend the consultation period.
We have a real issue with dog worrying and sheep kills. However, in those cases, it is irresponsible and reckless behaviour by owners who are not keeping track of where their dogs are and their dogs are escaping and killing sheep. The owners normally are not there with a remote control to call them back; the dogs are normally causing slaughter. Therefore, the idea that the collar is being used in those cases, where reckless people are not looking after their dog-----
The remote control is not to call them back; rather it is to prevent them from going near sheep in the first place.
That is a perimeter around a garden.
This is an important consultation. I do not think it is the way to train dogs. I spent much of my youth training dogs and sheepdogs for local farmers. Anybody who has to use one of these is not a good trainer.
That is a big statement.
That is not how you train dogs.
Vets will not agree with the Minister.
That is not how you train dogs. There is a purpose and use for them regarding keeping dogs safe no more than I would stay from an electric fence as you, an animal or a dog would. That is boundary fence.
It is the same startle.
The case where somebody has a remote control and is shocking an animal with a collar is a different kettle of fish.
The public consultation is timely. Let us get people’s views in. I will provide the space and time for that to happen and we will then reflect on it.
Disability Services
I welcome the Minister of State to the House.
I thank the Minister of State for attending this morning. I wish to say "Hello" to my next door neighbour colleague from home, just across the border in Galway, the Minister of State, Deputy Anne Rabbitte. I appreciate how she really makes an effort to come when we ask her to deal with some of these issues and tries to solve them for us. It is appreciated by me and other people. I know she does not have a magic wand but, by golly, she tries, and that is appreciated.
I wish to take her on a little journey. We will call the boy Dáithí and he attends St. Anne’s National School in Castlerea, County Roscommon. Dáithí was diagnosed with autism in early 2021. He was observed by a speech and language therapist early last year at his school. His parents brought him to it for an individual appointment with the therapist in June 2023. On leaving that appointment, they were of the impression from the therapist that she would be in contact to observe Dáithí in his home environment. His parents tell me that since then, they have heard nothing.
At the end of November 2023, they made contact with the early intervention services for Roscommon as to see what was happening with the therapist. They were informed that no therapist was available and the person they contacted could not tell them if one would be available in the future.
Since Christmas, they have made contact again. There is no therapist available and probably will not be in the near future. I have spoken to staff in the HSE and can confirm that. They have spoken to the school principal and she informed them that along with Dáithí, there is a large number of children with special needs in the school-----
Has the Senator changed the person’s name? We are not allowed to identify a person.
I am only using the Christian name.
Did the Senator get permission to use their name?
Yes, full permission. I have it written on my laptop if anyone wishes to see it.
Okay. It is just the rules of the House; it is not me.
That is fine. Now, where am I? My train of thought is gone.
There are a large number of children with special needs in this school awaiting this service, which we all have to agree is unacceptable at this day and age.
Dáithí will be six years old in March, in a few weeks. His parents say that watching him make an effort to talk to his parents, siblings and grandparents is soul-destroying. He gets upset, annoyed and anxious - I have witnessed this in other cases as well - when he is not able to express and tell them what he wants. Parents know the situation here. If Dáithí got the help he needs, his parents think he would change.
Not only Daithí but all children in his situation deserve that chance. His parents feel let down and that he should be getting this help. It is a long time since last June.
I am asking the Minister of State to look at this case to see whether the vacant position can be filled. The person who previously had that role moved on to something else. My understanding, which the Minister of State can correct if I am wrong, is that another person was going to take the position but decided not to at the last minute. The problem is not that the money is not there but there seemingly is some problem with filling the vacancy. It is really distressing for children like Daithí and many others. I know the Minister of State will put her heart and soul into addressing this issue. I do not know what information she can give me this morning but we must do everything we can to sort this out for those children and their parents.
I welcome the Minister of State, Deputy Rabbitte.
I thank Senator Murphy for raising this important issue. As Minister of State with responsibility in this matter, I wish to be completely clear that the development of any child with a disability to reach his or her full potential remains a matter of utmost importance to the Government. I am committed to further developing and enhancing our children's disability services through the implementation of the progressing disability services, PDS, roadmap for service improvement.
I acknowledge the difficulty facing children and young people with disabilities, and the frustration borne by their families, as the Senator clearly articulated, in accessing the appropriate therapists to provide the necessary supports they require due to vacancies in our health service. I assure the House of my determination to address these issues. Currently, there are ongoing challenges in the recruitment and retention of staff across the whole healthcare sector, particularly the therapy professionals required in children's disability services. This national issue is mirrored by a global shortage of healthcare professionals. The 2022 children's disability network team, CDNT, staff census notes an average vacancy rate of 34% across the nine community healthcare organisations, CHOs. In Roscommon, as per the data available at the end of 2023, the vacancy rate is exactly 34%, with ten whole-time equivalent, WTE, vacancies and a caseload of 770 children.
I assure the Senator that the HSE's national recruitment division will continue to explore a range of options to enhance the recruitment and retention of staff to CDNTs. The HSE's "Be part of our team, be part of their lives" campaign, launched in December and January, is the first nationwide CDNT campaign focusing on the recruitment of dietitians, occupational therapists, physiotherapists, psychologists, social workers and speech and language therapists. The campaign has been very successful, with 500 offers received. The HSE is going through those offers and the plan is to get back to people by mid-February, with the first round of interviews to be held by 1 March. That is a really positive step. It is important to note that while there is currently a recruitment embargo in the HSE, there is no embargo within disability services. However, there may sometimes be some misunderstanding or issues in this regard. Last week, I met all the disability managers right across the country, in some cases along with their colleagues, the chief officers. It was identified at that meeting, where we talked about assessments of need, AONs, that some CDNT teams have not received a derogation or approval for recruitment. I am meeting the CEO of the HSE, Mr. Bernard Gloster, later today. I will ask him to sign off immediately on a derogation for the recruitment of 150 staff to fill the vacancies in CDNT teams.
Under the PDS roadmap, a suite of measures is being progressed to enhance the recruitment and retention of staff, including targeted national and international recruitment of qualified personnel, completing new administrative grades recruitment to minimise the administrative burden on staff and optimise the time available for therapeutic interventions, and an expansion of therapy assistants in the system, with the HSE supporting individuals to return to education to qualify as therapists. The latter is a huge pillar of our newly launched PDS roadmap. Over the next two years, we hope to recruit 250 assistant therapists. In Daithí's case or that of any other child, where the speech and language therapist has drawn up a programme, the child will be supported by the assistant therapist, whether that be the occupational therapist, physiotherapist or speech and language therapist. In addition, as I discussed with Senator Carrigy yesterday, I am looking at implementing centre-based approaches in the community. This would involve hubs, which are not part of the CDNTs, providing workshops for families, peer-to-peer support for young people and proper signposting of services.
I thank the Minister of State for her detailed response. I note that 500 people have applied for vacancies in CDNTs and their applications are being processed. I hope there will be some results out of that. I realise the Minister of State has more than enough meetings to attend but will she consider meeting Daithí's parents with me at some stage? A short meeting would be fine. She has a very good grasp of their situation and similar situations but sitting down with the parents for 15 or 20 minutes for a chat would be great.
The Senator's straight question demands a straight answer. I will, of course, take part in such a meeting, if he wants to set it up. Only last week, in Sixmilebridge, I met the staff of two mainstream schools, including special educational needs organisers, special needs assistants and principals, along with colleagues from the HSE. We had a really good, frank discussion on how we can best support the children, most importantly, and their families. If I can help in any way in supporting that, I will do so.
I thank the Minister of State.
Consumer Prices
I welcome the Minister of State, Deputy Richmond.
I thank the Minister of State for taking this matter, which is impacting worried parents all over the country. In the past decade and particularly since the Covid pandemic, the price of infant formula has shot up. The price for an 800 g can in some of the main supermarkets varies between €15 and €25. A baby may need up to ten cans of formula a month, which ends up costing the equivalent of 18% to 20% of the monthly State maternity benefit or 143% of the monthly child benefit. We have a responsibility to protect new parents from this type of price gouging, which is far above national inflation rates. The consumer price index for baby food increased by 7% in the 12 months up to December 2023, which is well above the national rise across other goods. This is not just happening in Ireland but also in the UK. I have head of cases where the cost of infant formula has increased by between 30% and 50%.
Of the baby formula brands available, there are six that manufacture in Ireland. Generally, however, only Nestlé and Danone are commonplace named brands on supermarket shelves here. The monopolisation of the baby formula market is playing a direct role in profiteering and the exploitation of new parents. We need to protect parents and ensure babies throughout the country have a stable and affordable source of nutrition. Ireland is a net exporter of baby formula and we subsidise its manufacture through Enterprise Ireland. Since 2014, €13.2 million has been paid to six formula companies through Enterprise Ireland. In theory, that should be cutting the cost of production and reducing prices for Irish consumers. Instead, vulnerable babies are at risk of hunger and worried parents are forgoing their own needs in order to feed their child. In some supermarkets, formula is security-tagged because it is among the most shoplifted items. In the UK, the competition regulator is investigating the baby formula market, with a focus on the disproportionate price increases and the lack of generic brand options. I am writing today to the Competition and Consumer Protection Commission, CCPC, to ask it to investigate the situation in the market in Ireland.
There are three actions the Government can take to address this issue.
First, we have the ability to employ sections 61 and 62 of the Consumer Protection Act, which allow for the setting of price caps on specific goods to protect new parents and children. I have checked this, and according to European Union law, we can allow supermarket vouchers to be applied to stage one infant formula. Infant formula is currently classed, with alcohol and cigarettes, as a non-essential good, which is not covered by a voucher system. It is stigmatising and helps absolutely nobody to treat formula in this way. The formula system is not specific to what goods people choose, so the marketing of formula does not impact on the WHO code. We should provide formula directly to low-income parents who want to formula feed. The UK has the healthy start scheme, which we do not, to help any parents who require infant formula. Second, we need to treat formula as an essential good and ensure there is a low-cost generic formula option available to all parents. A failure to do this and actually tackle it expressly permits multinational companies that produce in Ireland and that benefit from subsidisation by Irish taxpayers to exploit children and parents. Investigating the market, preventing monopolisation, price capping formula, applying vouchers to it and allowing a low-cost generic option to be provided to parents and children is essential to ensure that all children, regardless of how they are fed, receive essential nutrition.
I welcome our students and their teachers this morning. It is lovely to see young people in our Gallery. I thank them and hope they enjoy the rest of their visit.
I thank Senator Moynihan for raising this vitally important issue. I am through the gap of needing baby formula in our household, but it was not long ago that I absolutely empathised with those parents who are seeing the prices rise and rise. The Senator has raised some key issues that require a direct response, and I will get to that. Before I do, I will talk more generally about grocery prices in the State over the past calendar year. This would have been a particularly big issue around June and July when it dominated the headlines. We saw worrying rates of grocery inflation in the State, way above general inflation, and indeed way above the overall 7% on baby formula cited by the Senator. We are seeing grocery inflation ease down. It is between approximately 2.5% and 3% at the moment. That still means prices are going up, but we got a commitment from supermarkets that they would cut prices on essential goods, which they have done. I am not here to champion the supermarkets. I am not here to champion any particular brand, but we saw cuts in particular in essential goods when it comes to foodstuffs and beyond. We saw cuts from each supermarket in the region of between 700 and 800 items in own brand. Own brand is key, in particular when we talk about this area.
In June last the Competition and Consumer Protection Commission conducted a high-level analysis of the overall grocery sector in Ireland. The CCPC report found that there is no excessive pricing in the sector, which the report sets out is a high-volume, low-margin industry. I would welcome Senator Moynihan's letter to the CCPC. Even though it sits on the other side of the Department to the one I work in, I will contact it directly on foot of this debate saying that I too would support such a look at it.
On infant formula specifically, Article 10 of Commission Delegated Regulation (EU) 2016/127 sets out the requirements for promotional and commercial practices for infant formula. This does not make provision for free or low-priced products, samples, special displays, discount coupons, premiums, special sales, loss leaders, tie-in sales or any other promotional gifts, to promote the use of infant formula. These measures are designed so that the marketing and distribution of infant formula does not interfere with the protection and promotion of breastfeeding. While this is well intentioned, it has the knock-on impact that we have a situation where, as the Senator laid out, a customer has vouchers from a particular supermarket we all know and can spend them on most items bar alcohol and baby formula. I think we all agree it is eminently sensible they cannot spend them on alcohol. However, baby formula is a slightly different one. However, as Senator Moynihan will appreciate, breastfeeding policy falls under the remit of the Minister for Health and national health policy, including the Healthy Ireland framework. This is an area we may need to explore, but that gives the reasons.
I turn to the Senator's direct asks. She makes two contradictory requests. I am not getting into a political debate here. We talk about the use of price caps, the use of section 62(1) and then stating an understanding concerning the potential monopolisation of the infant formula market. I think I remember the Senator's colleague Deputy Ged Nash initially mooted the issue of price caps during the summer. That was withdrawn and it was withdrawn by others because where price caps have been introduced in Croatia and Hungary, we have seen the rate of inflation go up to 50% in the case of Hungary and 20% in Croatia. In Spain, where the socialist Government looked at the potential of introducing price caps with regard to grocery inflation in November 2022, there was a massive backlash because this would have led to a massive impact on smaller and rural shops, and there would have been a lack of goods more generally getting into market. It would reduce supply to singular. That is why I am loath to go down the price cap route for any product, to be frank. I am giving the Senator a straight answer to a straight question in that regard.
I am more than happy to take up the issue of supermarket vouchers with the Department of Health, and I would appreciate her engagement with that. Indeed, Senator Flynn might have some thoughts on it as well. I know she has spoken out on related issues. I think the UK's healthy start initiative sounds excellent. There is no reason why we cannot potentially have something achieved in this jurisdiction. I undertake to raise that with the Minister for Health. I will speak to the Senator's final point when I get the chance to come back in.
I thank the Minister of State. I appreciate him outlining it from a consumer protection point of view. I saw a reply from his colleague, the Minister of State, Deputy Naughton, when Deputy O'Reilly asked this question last May because it has been an existing issue. She essentially received an outline on the promotion of breastfeeding, which read to me as saying the Government was not going to do anything because people should be breastfeeding, which certainly does not help any parents. I find those answers really frustrating so I appreciate the Minister of State's engagement. I understand the issue about coupons applying directly to formula, but these are general supermarket vouchers. It should not contradict the WHO code, because it is not applying directly to formula. It is not applying directly to brands, which is marketing, but it is allowing them to be applied across the board. It is more of a marketing tool for supermarkets than for particular brands in themselves. It should not impact that. I had a look into that European Union directive. As far as I understand, that has been repealed, or it has not been replaced. Maybe we can explore around that a little more. This issue was raised in the UK and Danone has already decreased its prices by 7%. The key thing is making available, at the Government level, low-cost, generic formula for all. That does not contradict WHO guidelines, but people who use formula are able to avail of a low-cost, generic option.
We can definitely dig in a bit more on the general use of supermarket vouchers. I could easily have given her the response that just went into the merits of breastfeeding over formula, but apart from the fact that my wife would kill me-----
I would kill him too.
-----I do not think that is any use to the discussion we are having. I do not think it realises the lived experience, for want of a better phrase, for many people. I think the issue of low-cost, generic formula may be teased out in parallel to this. The Government is obviously not going to get into the business of producing baby formula. However, the Senator is right that more than €30 million in grant aid support was given to companies that produce baby formula, among other products. These are great companies that employ a lot of people and our exports to China and Mexico are huge in this area for a reason. However, let us see what conditionality can be looked at. When I spoke to the Senator previously about wider grocery prices, the emphasis was making sure that essential goods were available at a lower cost, in particular through own-brand labelling. That might be a solution if we had some form of own-brand labelling in infant formula. That might be able to look at achieving what has been achieved in the UK. I am happy to speak further in due course.
Business Supports
I feel this is an important and timely Commencement debate on the pressures being faced by small businesses right across the country. To be clear, I am talking about those that are predominantly high-labour, low-margin, food-based businesses, but also small retailers like the corner shop and newsagents. We all know that many elements of our economy are doing exceptionally well at the moment.
There are record-low unemployment levels because of the pro-business approach by the Government over the past number of years, particularly during the pandemic period when exceptional supports were put in place for individuals and businesses to stay afloat. We know that was the right thing to do because of how well our economy bounced back after the pandemic. Equally, I am sure the Minister of State would acknowledge that there is a cohort of businesses which are struggling at the moment. I speak to those small businesses every week across Waterford city and county. They are the heartbeat of our cities, towns and villages. They are the cafés and restaurants where we have our special occasions, the fish shop, butcher and bakery where we get essential items and the newsagent and deli where we get sandwiches and newspapers. The Minister of State visited many of them with me last year in Dungarvan and Waterford city. One business owner to whom I spoke last week, who has a café and restaurant, has a margin that has gone from 9% to 1% in a very short time. That is not because of anything he has done differently. That is the point. There is no one factor that has caused these pressures. Rather, the cumulative effect is squeezing margins. Energy costs for businesses continue to be exceptionally high. We supported businesses last year through the temporary business energy support scheme. While domestic rates are starting to come down, business rates are still very high. They are causing problems. The minimum wage increased to €12.70. It is not the increase itself but upward pressure from those a few euro above the minimum wage that is causing the squeeze. Tax warehousing will be an issue for many. While there has been a reduction in the amount of warehoused debt and the number of businesses that have warehoused debt, there must be in-built flexibility over a short period. Those businesses need to know that flexibility will be available to ensure they can trade out of this challenging period.
The common denominator across the businesses that are struggling is that they are food-based. The Minister, Deputy Donohoe, introduced a special rate of 9% at a difficult time in November 2020. That was increased for the whole hospitality sector in the last budget back to the normal rate. There is a strong case for differentiating between food-based businesses and the wider hospitality sector. We saw price gouging across the hotel sector, largely by the chains in the capital and not by smaller hoteliers in regional Ireland. Food-based businesses are struggling.
A communication campaign is needed around the increased cost of business support grant scheme. What is it exactly? How will it be paid? It is essential for cash flow at the moment. It is vital that support gets out to businesses now and not in a number of months. They need cash flow in now, in January.
I am grateful that Senator Cummins raised this matter. I appreciate his constant support and championing of businesses across the city and county of Waterford.
It is understandable that many of those businesses are concerned about rising costs at the moment. At present, small businesses are facing several challenges due to rising energy costs, inflation and a tight labour market, which the Senator mentioned. I also want to make clear that we in the Government are aware that while many of these costs are out of control, some have been generated due to policies we introduced - good policies we stand by and are important. While increasing the minimum wage, paid sick leave and various types of family leave and introducing a new public bank holiday are good moves and fundamentally the right thing to do, we acknowledge that they come with costs. For any business that closes, it is a difficult decision which I wish to acknowledge, as well as any business struggling at the moment, looking over the accounts on a Sunday night, perhaps, at the kitchen table at home, never mind with their accountant. I want to be clear, however, that we are engaging with small businesses to hear their concerns. Last week, a meeting took place between the Restaurants Association of Ireland, the Minister, Deputy Coveney, and my office at which the supports the industry needs were discussed. We are open to helping where we can but we need to ensure supports are designed to have the maximum impact.
The Department prepared a report examining the impact of recent costs on businesses with a direct focus on legislative and policy changes initiated by the Government. Many businesses fed into this report, shared their experiences and even their own costings and financial figures to ensure their sector and its needs were represented. This report is being finalised in the coming weeks and will impact and provide a pathway for decisions moving forward. The report is at a high level. We have not gotten into the full detail. It is being discussed with our colleagues in the Department of Social Protection. Having discussed it with the Department economist who compiled it, the vast majority of businesses are able to take on these costs easily. In retail, many of the large multiples are already paying the living wage so moving the minimum wage up does not impact them. There is a direct impact on food-based businesses, which the Senator cited, such as restaurants and cafés, which are perhaps separate from hotels, as well as certain pubs and bars and much smaller retailers - not all of retail but small retail. The common denominator between these sectors is that they are low-margin, high-labour.
The Senator asked about the increased cost of business grant. This is a short-term measure to provide immediate relief to up to 95% of rated businesses. As it stands, we have budgeted €257 million. These refunds will go to about 143,000 small businesses. Under the terms of the scheme, if a business paid less than €30,000 in commercial rates last year, it will receive a cash injection of up to €5,000 in the first quarter of this year. It will be targeted at exactly the businesses the Senator mentioned. It is not to cover every cost. There has been an element of misinformation, which was not deliberate. Some people are wondering if it is a commercial grant rebate and whether there is an application process. The answer is "No". We are working with our colleagues in the Department of Housing, Local Government and Heritage and hope this will be a direct cash injection using the rates system to calculate the amount paid and as a reverse payments method. Rather than paying money out of your account to the local authority for commercial rates, you will get a cash injection back using the same method. We expect all of these grants to be paid out by the end of this quarter. There is no application process needed. The Senator also mentioned TBESS, which is a wonderful scheme but it did not have a huge pick-up because it was quite complicated. We budgeted double the amount paid out in the TBESS for the increased cost of business grant. It will get to more businesses quickly. It is only a start. There is an awful lot more that can be done. I am open to further suggestions from the Senator and other colleagues.
I welcome the students from Glasnevin and their teachers. It is powerful to see our young people coming into the Houses. We hope they enjoy the rest of their visit.
I also hope they have an enjoyable day. To follow on from some of the Minister of State's points, the increased cost of business scheme must get to businesses quickly. I stress the need for immediate dialogue with local authorities to ensure it gets to businesses. It is not misinformation but more of a misunderstanding of what the scheme actually is. A communication campaign by the Department around what it actually is would be useful. When will the report on the increased cost of business be published? Most importantly, will the 9% VAT rate for food-based businesses in particular be looked at again? I feel it has to be.
Dialogue has already started with local authorities on the increased cost of business scheme. The Department of housing and local government has been working with the Department since the budget was agreed to make sure the scheme is fit for purpose. I fundamentally agree with the Senator that a massive communications campaign is needed beyond the political narrative. We will ensure that information is provided, tying in local authorities and local enterprise offices.
The report will, I hope, be published in the next fortnight. That report will go a long way towards influencing and deciding policy objectives of the Government going forward.
The Senator is correct regarding the VAT rate and the emergency cut to 9% that previously applied. It was extremely effective. It was a lifeline for many businesses but, unfortunately, it was too good for too many businesses and many businesses that did not deserve it were getting it. I fundamentally believe that we need to examine the VAT rate for food-based businesses as a priority including restaurants, cafés and small retail as well.
I realise we are over time, a Chathaoirligh, but please allow me the latitude because an issue raised by the Senator that I did not address in the first place relates to tax warehousing. That debt falls due on 1 May. The Minister for Finance, Deputy Michael McGrath, has announced that he is working with the Revenue Commissioners to make sure there is flexibility in terms of payments and repayments. We do not want this to be the sword of Damocles hanging over any business. We are going to make sure that no business will have to close. They will pay their tax debts but in a way that will make sure they are able to stay open.
Cuireadh an Seanad ar fionraí ar 11.21 a.m. agus cuireadh tús leis arís ar 11.30 a.m.
Sitting suspended at 11.21 a.m. and resumed at 11.30 a.m.