The Government’s job initiative may be a step in the right direction but far more clarity is needed on how its implementation will come about, according to the Galway Chamber of Commerce.
Speaking to the Advertiser yesterday, chamber CEO Michael Coyle gave a “guarded welcome” to the jobs initiative which was announced and outlined by Minister for Finance Michael Noonan on Tuesday.
The plan, which has a major focus on jobs creation and boosting the tourism sector, includes measures such as lowering the rate of employer’s PRSI by 50 per cent for lower paid workers, the introduction of a new nine per cent VAT rate for tourism-related goods and services, the removal of the €3 travel tax, reform of visa rules to try to capitalise on visitors to the London Olympics, and around 30,000 new places for the unemployed to be created on skills courses and other labour force activation shemes.
However the main bone of contention is the proposal to pay for the jobs initiative by placing a temporary levy of 0.6 per cent on funded pension schemes and personal pension plans for a period of four years. Mr Coyle has warned that such a move on pensions by the Government could face major legal challenges and more clarity is needed in order to truely see what benefits the initiative will bring.
“The initative is a step in the right direction and the measures are generally positive. We would welcome the reduction in VAT, the abolition of the air travel tax, and the changes with visa rules as this has very good implications for tourism. However there is a lot that is subject to further legislation and discussion. It would be quite difficult at the moment to pick out pieces that are definitely going to make a change. The levy on pensions, for example, if this is brought forward legislation would need to be introduced, this is what will fund the initiative. There could be a legal challenge in this.”
The Galway Chamber of Commerce would also have concerns about the number of uncertainties in the initiative, namely the progress, if any, on the loan guarantee scheme. In the announcement this week there was mention of an unspecified package of measures to make credit available to businesses. Referring to this Mr Coyle said that not enough information has been provided on the Government’s plans to support businesses and protect existing jobs.
“It’s important to protect jobs that already exist, as jobs not lost have the same status as jobs created. I would have grave concerns for the level of local authority commercial rates and its impact on businesses. There is nothing in the initiative about protecting existing jobs,” he said. Despite these issues, Mr Coyle added that the chamber welcomes “anything with the potential to take people off the dole queues”.
Meanwhile Galway hoteliers welcomed the range of initiatives. Acknowledging the Government’s recognition that tourism could act as a significant driver of growth in the economy, the Galway branch of the Irish Hotels Federation (IHF ) described the announcement as one of the most comprehensive policy initiatives supporting the tourism industry over the last decade.
Branch chairman Paul Gill welcomed the introduction of a new nine per cent VAT rate for tourism-related goods and services including hotel accomodation, as “it will improve cost competitiveness and help tourism businesses provide even better value to visitors”. Mr Gill also said that plans to reduce employer’s PRSI “will act as an important incentive toward employment retention and growth in troubled sectors of the economy”.
Regarding other aspects of the inititive Mr Gill said: “ Galway hoteliers welcomed the Government’s plans to abolish the €3 travel tax”. He stated that, combined with significant discounts on airport charges and the setting up a fund to market new routes, the move would form a sound basis for building a more coherent strategy for Irish tourism. He also welcomed the opportunities offered by having a simpler visa process for visitors entering the UK and wishing to visit Ireland. It is hoped that marketing initiatives to persuade these visitors will be aligned with the new common visa treatment. “The IHF has long called for an initiative of this nature to attract overseas visitors from crucial emerging markets. It is particularly significant that it will be in place to accommodate the thousands of visitors to the London Olympics next year,” he said.
Fáilte Ireland’s head of operations for the West, Mid West & Lakelands Regions, Fiona Monaghan, also welcomed the initiative stating that: “This timely and significant initiative should provide a much needed stimulus to the fortunes of tourism businesses around the country. The changes announced today will provide a major shot in the arm to an industry which is very much people-centred. Anything which boosts tourism will naturally boost jobs, and the announcement is very much welcomed.”
