Richard O'Donoghue warns VAT delay will force businesses to close
Richard O'Donoghue criticised the delayed implementation of a 9% VAT rate for hospitality and hairdressers, saying it should take effect immediately to prevent business closures. He opposed means-testing for carers' payments, criticised changes to the USE charge without lifting tax brackets, and warned working people face rising costs with no reward.
VAT timing and business impact
He welcomed the 9% VAT rate for hospitality and hairdressers but said its July start is too late for many firms. He argued that some businesses were banking on an earlier VAT cut to absorb three wage increases over the past two and a half years and warned they may not survive until July.
Pressure from rising costs
He highlighted rising energy, fuel and food prices and said those cost pressures are squeezing household budgets and business margins. He argued that immediate relief would have helped prevent price rises passing through and would have eased the burden on working families.
Carers payment and means testing
He acknowledged an increase in carers' payments to 1,000 euros but said caring should not be means-tested. He stated "there should be no price on caring," arguing carers provide essential support the State cannot always deliver and that means tests are inappropriate.
USE charge and taxation of workers
He criticised lowering the USE charge without increasing tax brackets, saying that combination effectively raises the tax burden on workers. He recalled the USE charge was introduced as a temporary five-year measure and said the budget should have returned more to those in work.
Social consequences and appeal to the minister
He described families relying on food banks and parents skipping meals to feed children, and urged the minister to consider the vulnerable people who are working. He warned the Government's approach risks imposing years of acute stress on households before any electoral relief is offered.
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Thank you, Chair. Minister, I'll start off and acknowledge the 9% VAT rate for the hospitality and hairdressers and all concerned for it. And I welcome it, but I would have welcomed it when other budgets are put in place, they happen straight away. So if the price of diesel is going up, you can do that tonight. But when it's a VAT rate, you have to wait till July. A lot of businesses won't be in business by July because they were banking on the VAT rate coming down to sustain the three wage increases that they have received over the last two and a half years. And it's hard enough to keep the doors opened. If the VAT rate had come in now, it would have actually also have looked favourably on not increasing your costs. Because if you look at the cost of everything at the moment, energy costs and everything, everything is going up. So if you have a base margin, the prices go up. I also acknowledge the movement on the carers and what went up to a thousand euros. But there should be no price on caring. There should be no means test on caring. Caring is caring. There is no price on caring. So regardless of whether you have the means or not, it should not be means tested. It's care. And it's care that the government can't provide. And it saves the government money on care that they are caring for people outside of where the government can't provide care. So to me, it's not a means test. I've spoke already on the USE charge. And by lowering the USE charge without moving the tax bracket up, you actually tax people more. This budget should have been given back to somebody that's working. Somebody that's working. Give them back something. Even ever how small it was. But give them back something. Not take more. The USE charge was brought in as a temporary measure for five years. But yet it stands here. And you reduced it. Which it shouldn't have been done anymore. And you raised the tax base. How can you look at people that are working in this country in the eye and say to them, the price of your food's gone up. The price of the fuel in your car's gone up. The price when you're going to work is gone up because of the fuel of your car. The price of transportation of your children anywhere is going up because of the price of inflation. There is no reward system for a person in this country that works. And let nobody be under any illusion. What the government are doing is they're going to hold the purse because they reckon that they can hold the government together for the next couple of years. And they're going to, next government again, when it comes to the year of election, they're going to hand out the sweets again and say, we're great now, we're going to hand it out. But they're going to put people through a couple of years of torture. A couple of years of stress to try and keep their head above water. I've spoke to an awful lot of agencies where they've seen that the mothers and fathers have done without food to make sure that children have been fed. And they're working. They're working. And they have to do it without food. Ask the people that are supplying the food banks in this country. And they'll tell you the people that are coming to them. People that have put houses over their own heads and no burden on the state have agreed to work and work hard for the less well-off and you don't give them any bit of reward. Minister, I'm asking you to please look at the vulnerable people in this country. And the vulnerable people in this country are the people now that are actually working. Thank you.
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