Dáil Éireann Debate, Tuesday - 27 February 2024
172. Deputy Brendan Griffin asked the Minister for Enterprise, Trade and Employment if he will introduce a financial support package for small businesses and rural pubs to offset the recent increase in the minimum wage, VAT and energy costs; and if he will make a statement on the matter. [8734/24]
View answerI am cognisant of the difficulties faced by small businesses across the country, including rural pubs, due to rising costs and changes in the cost of doing business.
My Department, in collaboration with the Department of Social Protection, is assessing the cumulative impact of recent and forthcoming changes to working conditions. These measures include the move to a Living Wage, in addition to other measures such as the Auto-Enrolment Retirement Savings Scheme, Parent’s Leave and Benefit, Statutory Sick Pay, the Additional Public Holiday, and Remote Working. This follows a recommendation by the National Competitiveness and Productivity Council that a cumulative impact assessment be undertaken.
In preparing this report, officials from my Department met with representatives from a cross-section of enterprises who are among the most impacted by forthcoming changes to working conditions. My Department also hosted workshops with both employer representatives and trade union officials, providing stakeholders with an opportunity to articulate their views on forthcoming changes. As part of this engagement, my Department sought both quantitative and qualitative information, which provided valuable evidence of the impact that these measures are expected to have across a range of sectors.
This report is currently being finalised and will inform public policy in this area. While I am acutely aware of the cost pressures associated with these recent and forthcoming changes, they are necessary in ensuring that workers in Ireland can avail of the same conditions as in many of our main trading partners.
It is important to recognise that the Government has been proactive in providing necessary support to business in recent years, faced with the challenges caused by the COVID Pandemic and invasion of Ukraine. The Temporary Business Energy Support Scheme (TBESS), the Business Users Support Scheme for Kerosene (BUSSK) and the Ukraine Enterprise Support Scheme have provided significant benefit to business throughout this period of rising input costs and prices. In addition, many rateable premises will have benefited from the commercial rates waiver scheme that was in place from 2020 to the first quarter of 2022.
A wide range of supports were also made available to struggling SMEs in Budget 2024. These include:
• the extension of the 9% VAT rate on gas and electricity to the end of October 2024.
• the extension of the temporary excise rate reductions applying to auto diesel, petrol and marked gas oil until 31st March 2024;
• an increase to the VAT registration thresholds since 1 January 2024, from €37,500 for services and €75,000 for goods to €40,000 for services and €80,000 for goods.
Furthermore, the Increased Cost of Business Grant will provide support to many small and medium enterprises operating from rateable premises, with €257m allocated for the scheme. While the ICOB is not intended to directly compensate for all increases in wages, or other costs, for every business, it is expected the once-off relief will provide a welcome cash injection of up to €5,000 for many small businesses across the country.
The administration of the ICOB grant will be carried out by Local Authorities and it is intended that eligible ratepayers will begin to receive payment in the first quarter of this year. It is not intended that there be a formal application process, rather it is intended that qualifying businesses will be contacted directly by the Local Authorities. The grant scheme has been set up in this way so as to ensure that the scheme is accessible to smaller businesses, who may have had difficulties availing of previous schemes. Local Authorities are in the process of setting up a system in order to pay out this grant and will write to each eligible businesses in the coming weeks. It is important to note that the ICOB grant does not constitute a commercial rates waiver and all firms should continue to pay their commercial rates as normal.
I am not planning any schemes specifically linked to increases in the minimum wage, changes to the VAT rate or energy costs at present. Nonetheless, it is important to recognise that many small businesses with a rateable premises, including rural pubs, are likely to benefit from the grant payment provided through the ICOB.
