Budget 2020: ‘It's a comfort knowing there's a pot there’ - Director of export business praises emergency Brexit fund
THE managing director of an export business based in Cork has praised the emergency fund put in place for businesses likely to be affected in the case of a hard Brexit.
John Greene, of Diamond Freight Services in Farmers Cross, said that his business will be forced to absorb tariffs and labour costs associated with Britain leaving the European Single Market.
The 65-year-old praised budget funding going towards ensuring businesses affected by Brexit have some type of a safety net for their reduced income.
“Brexit is going to have a huge effect on our company. It's hard to prepare for it,” he said.
"If it's a hard Brexit, there will definitely be tariffs because the UK will be treated like a non-European country. And a soft Brexit... the best we can hope for is that they have a Canadian or Norwegian type of relationship with the EU.
"The cost would fall on us, we'll just have to absorb the costs. We'll actually be adding to the costs, because we'll have higher fees for processing new declarations, so we'll have found some way to help customers overcome the shock.
"We might have to reduce our fees by 40pc or 50pc. We're just doing it off our own bat, because we're well-run and profitable. The temptation is there to just add it on, but we can't really do that. With our existing customers we'll have to reduce the cost to the UK, while the international fees will cost the same.”
Diamond Freight is an air-shipping service which rents space on planes from Cork Airport and ships items such as computers, pharmaceuticals, chemicals and hardware internationally for the likes of Apple, EMC and Dell. In the event of a no-deal, or hard, Brexit, his company would be strongly affected.
Minister of Finance Paschal Donohoe announced yesterday that the Government was allocating over €1.2b, excluding EU funding, to respond to Brexit in a two-part package that will see €200m invested immediately next year and the rest saved in case of a no-deal Brexit.
Some €650m of this has been earmarked for the agriculture, enterprise and tourism sectors. A further €365m will also go for extra social protection expenditure in the event that unemployment rises as a result of a no-deal Brexit.
The remaining €390m of Brexit contingency expenditure will be determined closer to the time and will assist farms, businesses and citizens.
Mr Greene said that in the current climate of uncertainty, he hoped Diamond Freight will fall under the 'businesses' section of the latter band of funding.
"This is all new to lot of companies trading with the UK,” he said.
"I think the emergency fund put in place is great. Some companies are going to have their back against the wall because there are going to be higher costs involved with importing and exporting to the UK after Brexit.
"I think they have to have a rainy day or emergency fund to get the businesses over the initial shock anyway, because it's all matter of adjustment, and it will adjust but there will be an initial shock.
"We're going to have all of these extra costs coming out of the UK and there could be a whole load of other hidden fees and charges that we don't know about. We're all in the same boat.
"We can't prepare for anything, because we don't know where to invest or what to do. That's why it's a comfort knowing there's pot there for businesses affected by Brexit in the worst-case scenario,” he added.