Following yesterdays Budget 2020 statement by Minister Paschal Donohoe, County Kildare Chamber welcomes the overall approach of the Government to opt for prudence and to prepare for the very real possibility of a No-Deal Brexit.
Speaking this afternoon, Chief Executive of Kildare Chamber Allan Shine said “The raising of stamp duty on commercial property purchases from 6% to 7.5% in the budget is alarming, branding it as harmful in selling Ireland as a predictable place to do business, “particularly at a time of heightened global economic uncertainty. We are disappointed but not surprised that the Government have ignored the pleas from the Tourism and Hospitality sector to reduce the VAT rate for the sector from 13.5% to 9%. Brexit will have a profound impact on this sector and we already see a huge drop off in visitor numbers from the UK.
Under normal circumstances, with the economy performing as well as it has been, we would be expecting a very different Budget. But in the words of the Minister, this is an uncertain and unprecedented time. We called for a Budget which would focus on steadying the ship of state and provide greater clarity regarding the measures that are to be made available in a no-deal Brexit scenario. Minister Donohoe delivered this clear statement today”.
We agree that it is a wise approach to provide financial flexibility into the Budget which will allow the government to respond and adapt to the consequences of a No-Deal Brexit, particularly if its impact is worse than foreseen. One recommendation we would make to Government is to call for any new support to be easy to access and easy to understand. The likely chaos of a crash-out Brexit will mean that SMEs will need access to immediate support and swift interventions.
We welcome the €1 Billion been allocated to the department of business as this will assist our state agencies with the work they carry out.
The approach by the Government to increase the Carbon Tax and ring-fence the revenue is welcome in principle, but it is our view that these measures do not go far enough. We had called on Government to ring-fence all revenue from carbon tax, which is likely to exceed €500m in 2020, not just the revenue from the increases. So we would like additional clarity on what the Government’s intention is on this.
Further, while the types of green investment that Government has announced are welcome, including the initiatives to support the Midlands, it’s difficult to see the approach as anything more than a missed opportunity. We could have used this Budget to do much more to support investment in grid infrastructure, a nationwide roll-out of EV charging points and the retrofitting of homes.
The supply of affordable and appropriate housing remains a critical issue for the business community, affecting productivity, recruitment and inflating wage growth demands. With so many economic threats on the horizon, policy uncertainty would discourage investment, therefore the maintenance of existing housing policies, such as Rent Pressure Zones and Help to Buy, is useful.
But while this certainty is welcome, an independent review of all our housing policies is essential so that any wasteful policies can be culled, and those resources made available for the most effective measures that will support supply and affordability.
Last but not least, the reforms to the KEEP scheme and the increase to Earned Income Tax Credit, which are long over-due, will be well-received by the self-employed and entrepreneurs.
While the Minister has been adamant that there will not be another budget if a no-deal Brexit emerges, perhaps it may become necessary to have an interim budget should the threat of Brexit recede. Ultimately, it’s the big things, like affordable housing and childcare, that businesses will need to see much more progress on in the months and years ahead.