Wednesday, 13 March 2019

Questions (174, 175)

Carol Nolan

Question:

174. Deputy Carol Nolan asked the Minister for Business, Enterprise and Innovation her plans to provide supports or incentives to employers in small hair salons throughout the State which have incurred a 4.5% VAT increase and an increase in respect of the national minimum wage. [12637/19]

View answer

Carol Nolan

Question:

175. Deputy Carol Nolan asked the Minister for Business, Enterprise and Innovation if grant aid will be provided to new hairdressing businesses as an incentive to promote business start-ups. [12638/19]

View answer

Written answers (Question to Business)

I propose to take Questions Nos. 174 and 175 together.

The Government, since 2011 has been firmly focused on restoring the economy to a more stable footing and sustaining existing jobs and growing employment in all sectors and in all parts of the country. The economy has recovered strongly and there are now more people at work than any time in the last decade. With the increase in employment and increase in earnings, there is now more spending in the economy and this is to the benefit of all businesses, including hairdressing and personal care sectors.

The supports of my Department to improve access to credit for businesses are available to businesses in the hairdressing and personal care sectors. These include loans of up to €25,000 available throughMicro Finance Ireland, the Credit Guarantee Scheme which is operated with the three pillar banks and also the Brexit Working Capital Loan Scheme. I am aware that many businesses may import products for the UK and Brexit may give rise to extra costs. I would also encourage businesses from all sectors to engage with their Local Enterprise Office (LEO), which offer a range of advisory and other supports in every county. In particular at this time of Brexit uncertainty I am encouraging businesses to consider participating in the LEO Customs Training programmes if appropriate so they can remain competitive in a post-Brexit environment. Skillnet Ireland and the Education and Training Boards are also engaged with the sector and again I would encourage business owners to engage directly with local providers on their changing skills requirements, in particular where there are requirements for reskilling and upskilling.

Stabilising the public finances and prudent fiscal management is an essential underpinning for a strong and growing economy and is essential to ensuring future growth prospects for all sectors. The Government’s ability to directly fund locally trading businesses is more constrained due to considerations of displacement, fairness and equity between businesses.

This Government has played its part in supporting the personal care sector when it most needed it with the introduction of the reduced VAT rate in 2011, which helped to sustain employment throughout the country in the sector.

As the Minister for Finance noted in introducing Budget 2019, while a Government’s decision to provide stimulus to the economy is often an easy one to make, judging when it is appropriate to withdraw stimulus measures is always more challenging. The Minister for Finance gave a commitment in the 2018 Finance Bill to undertake an economic analysis of the 9 per cent rate. The review found that the reduced rate has done its job. In the context of the new economic reality where the economy is strong, growth is broadly balanced and full employment is within sight, the Minister noted that it was appropriate to increase the rate of VAT and underlines the Government’s commitment to responsibly manage the public finances and maintain a broad tax base.