If Galway bars, restaurants, and hotels are to survive the recession then commercial rates and water charges must be reduced and all other local authority charges frozen.
This is the view of the Co Galway branch of the Vintners Federation of Ireland, which is also proposing that a new system of local taxation, akin to a property tax, should also be looked at.
The group made it views known at a presentation in County Buildings on Tuesday to the county manager Martina Moloney and her advisors.
According to the VFI there are some 400 pubs in the County Galway VFI, employing more than 4,000 people, and as such it is a significant area of employment.
However, the VFI presented a report to Ms Moloney on the effects of rates and water charges on the pub trade. According to the report, rates payments in the county have “gone up alarmingly” over the last number of years. Water charges are “increasing on a monthly basis” and have gone up by 38 per cent in the same period.
The VFI feels the charges are an “unfair tax burden” on the commercial sector that puts these businesses “at the mercy of local authorities which are the local monopoly providers of services”.
It said the rates and water charges were drawn up during an economic period very different to now. As such charges remain high when pub profits are reduced and businesses struggling.
“There is inadequate recognition of the current and future very weak economic environment and the fragile position of very many restaurants, public houses, hotels, etc,” said VFI Galway PRO Paul O’Grady.
He added that the recession, the shift to home consumption of alcohol, and cross border buying of alcohol has also affected business.
“These are serious economic issues because the sector is a very substantial employer,” he said. “A reduction in commercial rates will not by itself prevent that decline, but alongside other cost reductions it has to be part of the package of measures to support the sector and prevent bigger declines.”
The VFI says a new method of evaluating and levying rates should be looked at based on falling turnovers, pub closures, and the cost of the water charges.
The organisation is therefore calling for a 10 per cent reduction in rates this year and a 10 per cent reduction in water charges. If the latter is not possible, the VFI said the charges should be “offset by additional equivalent reductions in commercial rates”.
It wants to see a freeze on all other local authority charges at the current levels. It is also calling for the introduction of non commercial water charges; a new system of local taxation, which would be akin to a property tax.
“This should be used to reduce the requirement for other resources and not to increase expenditure,” said Mr O’Grady. “It should be a single integrated property tax charged to both the commercial and private sectors.”
