Duty, tax cuts welcomed but small firms still worry
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Thursday December 10 2009
Publican and hotelier Louis Fitzgerald was quick out of the traps yesterday evening, cutting the prices of beer, spirits and wine across his group about an hour after Finance Minister Brian Lenihan finished delivering the Budget.
Mr Fitzgerald, who owns pubs such as the Stag's Head, the Quays Bar in Galway and hotels in the capital, said he welcomed the decision to cut excise duty on alcohol.
"Price isn't everything and you have to sell an experience, but this is a good move for us," Mr Fitzgerald told the Irish Independent.
Mr Fitzgerald is also removing the 0.5pc of VAT that will be formally removed by the government from January.
Drinks Industry Group of Ireland, headed by Kieran Tobin, also welcomed the 20pc cut in excise duty on alcohol, saying it would come as a "great relief" to the trade.
But those moves by Mr Lenihan weren't deemed enough by the retail industry.
"Much more needs to be done to prevent the on-going exodus of shoppers to Northern Ireland at the expense of Irish retail businesses and Irish retail jobs," said David Fitzsimons, chief executive of industry group Retail Excellence Ireland.
Few stimuli
While he welcomed the reductions in excise duty and VAT, Mr Fitzsimons said the budget had failed to deliver any meaningful stimuli.
Business body ISME, which represents small- and medium-sized firms, said the Budget represented a "lost opportunity".
The association said that Mr Lenihan had "failed to recognise the plight" of many companies that continue to suffer from the high cost of doing business in Ireland.
Adrian Walsh, managing director of Fiat Ireland, yesterday welcomed the announcement that a car scrappage scheme for vehicles over 10 years old will run from January to the end of next December. It will give a €1,500 subsidy to buyers of new cars changing their older vehicles.
Car scrappage
"It will give people permission to drive a new car again," Mr Walsh told the Irish Independent.
He added that the scheme would be "very welcome" within an industry where a number of car dealers have gone into liquidation during 2009.
"This isn't a panacea to the motor industry woes, but it may provide momentum during 2010 that the trade can build upon," added Mr Walsh.
He also said the rise in petrol and diesel prices from last night under the guise of a carbon tax was unwelcome and said the government should have a single method of environmental taxation on motorists.
"The rise was just a hike in excise duty given a nice name," he said.
Construction
Meanwhile, the Construction Industry Federation (CIF) said the decision by the government to cut €1bn from its capital expenditure programme represented a "blow" to the building sector.
CIF director general Tom Parlon claimed the cuts to capital expenditure would "directly and significantly impact the future competitiveness of the economy".
The Institute of Certified Public Accountants in Ireland said it would have preferred if Mr Lenihan had used the banking system to stimulate the flow of working capital, but that the establishment of a credit review system is a "step in the right direction".
The Irish Banking Federation also said it welcomed the decision to establish an independent review process for small- and medium-sized businesses whose applications for credit from banks have been declined.
The American Chamber of Commerce in Ireland, which represents US firms here, welcomed the budget decision not to increase personal taxes and the commitment to keeping the 12.5pc corporate tax rate that had drawn so many firms here.
Chambers Ireland said the Budget has the potential to "significantly boost confidence" within the economy. Its chief executive, Ian Talbot, said the decisions announced must now be imposed to "ensure credibility" for the government.
- John Mulligan
Irish Independent
