A FINE Gael proposal that VAT for the hospitality sector come back to 11% is being met with scepticism, and not just from political opponents.
Maurice Walsh, General Manager of Durty Nelly’s in Bunratty said that while it would be a step in the right direction, it comes just a few weeks after a Fine Gael headed government refused to make such an adjustment in its final budget.
“The history to it is that there was extensive lobbying going on from the Restaurants Association, the Hotels Federation, the Vintners, to get the VAT back to 9% from 13.5%. It was falling on deaf ears and about two weeks before the budget as a last throw of the dice there was a suggestion it go to 11%.
“This was to try and get it heading in the right direction, but the Government said no. It was never really an acceptable figure, but the Federations felt it would have been getting it going in the right direction. The Government said it couldn’t afford it, but four weeks later they can afford it,” he commented.
Mr Walsh said that the situation in the hospitality sector is dire, with costs that have risen sharply and little scope to pass on further increases to a public also reeling from the severe inflation of recent years.
“The big fellas are starting to fall now. Dylan McGrath has had two restaurants close in the last while. There’s a company in Cork called Perry Street, there’s a number of fantastic operations now gone.
“These guys are good entrepreneurs, hard working people, but they just can’t make it work. If you take Dylan McGrath, he specialises in high quality food. He has to have high quality chefs, which are expensive. It’ll be back to bog standard stuff.”
Mr Walsh warned that there will be numerous closures in 2025 without a major policy intervention.
“The situation is that on January 1 the minimum wage is going to go up, the VAT isn’t coming down, so there’s going to be an extra expense for business and it’s going to be the last straw for a lot of people, I think.”
“Prices cannot increase any more than where they are at the moment and businesses can’t meet the costs that are there at the moment.”
Owen Ryan has been a journalist with the Clare Champion since 2007, having previously worked with a number of other publications in Limerick, Cork and Galway. His first book will be published in December 2024.