Matt Shanahan urges emergency rescue for tourism-sector SMEs

If I could speak and then maybe just raise some issues and ask the Minister to respond at the finish, if you please. Firstly, on behalf of the regional group, I'd like to continue to extend sincere condolences to the families and relatives of those recently bereaved because of COVID-19. We offer solidarity for those in recovery and again congratulate our wonderful healthcare workers for their efforts. Our continuing debt of gratitude to them can never be overstated. Minister, 2020 is presenting the most significant of challenges to our national economy. Nowhere is this more evident than in our tourism and hospitality industry. The sector is largely composed of privately owned SME operators. They have provided our national and rural economies with a sustainable economic dividend for many years. Tourism has helped transform the image of Ireland, cementing our reputation for business and social interaction. A wide range of enterprises draw business from our tourism sector, including retailers, pubs, restaurants, entertainment venues and public transport operators. The Irish tourism and hospitality sector has seen steady growth year on year, shaking off the effects of the financial crash. Dublin, the South West and the North East generate the most visitor numbers, but destination events and activities in the regions have helped create a pull factor to garner revenue share. In 2019, overseas tourist visit numbers to Ireland topped 11.2 million. Over 5.6 of these visitors came on extended holiday. These visitor numbers support much of Ireland's commercial tourism offering, including its 7,200 pubs, 3,100 off-license, 2,400 restaurants and 983 hotels. Employment in the sector pre-COVID-19 was estimated at 260,000 people. It was generating annual revenues of 7.5 billion euro, with net tax receipts to the exchequer of 1.9 billion euro. Nothing, however, could prepare the sector for the impacts of coronavirus, which has devastated the medium-term outlook and is now a mirror reflecting the challenges facing the entire small-to-medium enterprise sector in Ireland. The tourism and hospitality industry has been among the first to close, thereby cutting off all available revenue streams. When green-lighted to open, international visitors will be absent because of travel safety and financial concerns impacting in their own countries. The development of a vaccine triggering a restoration of financial and business confidence in customer countries and here at home appears somewhere off. The only clear pathway to sectoral recovery in Ireland is domestic market activity. This will be hampered with the restrictions of COVID management. Social distancing requirements, for example, will reduce customer volume, thereby reducing the consequent revenue return available. Without a seismic change minister in present national financial planning concerning the overall SME sector, Ireland Incorporated is heading for an employment meltdown and consequent economic damage that could impact for a decade and longer. Solutions ministers are being offered with respect to the tourism and hospitality sector, where presently 175,000 workers have now lost their job. I ask you to consider the following suggestions proposed from industry experts that I have recently consulted with. They highlight 10 key areas for immediate strategic review. The sector needs a task force made up of trade representatives from hotels, restaurants, airlines and estate bodies. I welcome your commitment to that. I hope to see it expedited as soon as possible. A reduction in VAT to a 0% VAT rate for tourism and hospitality for the period of the crisis and for 12 months thereafter, then reverting to the 9% period for five years. Rent legislation to protect commercial leaseholders. A rents incentive package, a scheme like France has implemented, the 60-20-20, where government supplements rent by 60%, the landlord reduces rent by 20% and commercial tenant pays 20% for 12 months of the crisis. Insurance reform is required, Minister. Payouts under business interruption and notifiable disease clauses are required. Forbearance in policies for the period of closure and no suspension of cover while business is closed. Wage supports to continue for restaurants and the hospitality sector until a vaccine is found. Support for people over the age of 66 and seasonal workers in the pump and wage subsidy schemes. A liquidity grants package through the Department of Business, Enterprise and Innovation to cover outgoings in the first six months following the return of normal trading. And a commercial rates write-off Minister for the restaurants and hospitality sector for the full crisis period until a vaccine is found. I welcome the three-month deferment, but it is unfortunately not enough. A ban on utility providers cutting off services and demanding payments when businesses are closed. And a review of standing charges for the closure periods. Also, Minister, our bankers need to provide a suspension of banking fees for the hospitality sector. Interest rates on loans should be at the ECB interest rates and a moratorium on existing loan repayments provided. And finally, a waiver of licences for outdoor tables and chairs for one year to enable businesses to reopen and adapt to social distancing using outdoor spaces. And if I may add one of my own, Minister, I would like to see your department lead on a buy-local, spend-local campaign as soon as possible to support local indigenous businesses. The financial packages presently under consideration, Minister, do not meet the needs of the SME or tourism and hospitality sectors. These businesses need money injected by way of grant support to compensate them for acting in the national interest. They cannot sustain more debt. They need deferments and incentives, such as I have mentioned, to allow them to repair their businesses and adapt to the new commercial realities of life after COVID, but before any vaccine becomes available. We socialised in extraneous debt in 2011 for our Financial Sector Minister. We took that decision not to save lives, but to prevent financial contagion to the wider economy. We now face a similar dilemma, but for very different reasons. To preserve life, we place the economy into an induced coma. Having done so, we must now resuscitate it and support it in every way to see it fully recover. The tourism and hospitality sector is a mirror that reflects the wider difficulties in our SME sector, which implies 70% of our present working population. We need to make dramatic financial provisions in order to resuscitate our economy successfully. Government mobilised the war effort, Minister, and used all tools at its disposal to fight COVID-19. It must now demonstrate the same singular purpose and vision to financially support our tourism and SME sectors to secure an enduring, sustainable and economic revival. Thank you. Thank you. Minister? Yes. Thanks very much, Deputy. I appreciate your interest in this topic and the suggestions that were made by you as well. Many of them we would have referred to throughout the course of this debate as well. I mean, I think what's really important here is that, you know, and I appreciate that everybody is coming at this in good faith in terms of the suggestions that are there and the ideas and the support for business. But we can't lose sight of the fact as well that with all of these suggestions, with all of these elements of assistance for business, comes a cost. And the cost will have to be footed by somebody and whether that is the local authority or whether that's national government. All of that money needs to be paid back and needs to be paid back by somebody. And I think that that's why all of the measures that are being proposed and looked at, I think it's really important that there will be a business case for those interventions. Whether it's a short, medium or long term case, again, is a matter that needs to be considered. But I think we just can't lose sight of the fact either that, you know, businesses will require assistance. But, you know, there has to be a balance struck in terms of how much the state spends to try to return to some level of normal activity, when the state spends that money as well, and where exactly it's directed. And I think that is the key challenge. And I do think that having a plan from the tourism sector that has backed up with strong economic arguments in terms of the types of supports that are needed and how those supports will actually generate further economic activity and will make sense, I think, is something that will very much help everybody in the sector. And I'm very keen to see that established as soon as possible. Can I just say that also, you know, obviously, as a deputy from the southeast, you know, we know that the regions and the rural areas are going to be the slower areas to recover. Areas most likely to recover quickly will be around the Dublin area. Again, that remains to be seen. And there may be other factors as well in terms of, you know, population density and all of that. But we know that for many areas in rural communities, tourism is the only show in town for so many people. Where, you know, there may be some agriculture, there may be some fishing, but tourism is really a lifeline for so many enterprises. And there's going to have to be a targeted response to ensure that those areas are supported. Something that I'm very keen to see developed into the future is utilisation of the fantastic coastline that we have from Dublin to Cork. We've seen how important the Wild Atlantic Way has been for all of those communities along the western seaboard. I think there's enormous potential, far more potential, to do more with that coastline from Dublin all the way down to Cork as well, along the east and southeast. And I think that's just one idea. There are loads of other ideas at the moment that I'm hearing from people. And I think that's something that would be positive as well for your area. I will complement very much things like the Waterford Greenway, which we've given further funding to extend recently, which I had the pleasure of cycling myself there two years ago. And these are the types of areas, I think, that will benefit in the post-COVID era. Thank you, Minister. Thank you.