Representative groups and businesses have been reacting to the July Stimulus package, agreed by the Cabinet this afternoon.
SME Recovery Ireland has welcomed some elements of the plan, but described the overall package as "lacking in scale and ambition" and a "missed opportunity" to pump much needed confidence back into Ireland's SME sector.
Chair of SME Recovery Ireland, John Moran said the plan incorporates some of the measures the group has been calling for in recent weeks.
"It has recognised the key role SME’s will play in the recovery and the need to protect them in as far as it includes a more robust grant scheme, an extended wage subsidy scheme and additional powers for the SBCI," he said.
However, Mr Moran said the measures do not go far enough to prevent firms from folding.
"A legacy of unpaid bills, liquidation sales and boarded up shop fronts in towns and villages across the country remains a real reality, while people dependent on unemployment payments face little hope of finding a new job," he said.
Mr Moran said he expects to see more businesses being forced to close in the weeks ahead.
"Being too frugal at this critical stage is a mistake – we must not be penny wise and pound foolish. If this plan does not permit the SME sector is to get back on its feet and drive the reboot of Ireland’s economy, the stimulus must then act as the platform to ensure that the National Economic Recovery Plan due to be published in a couple of months with Budget 2021, does more to provide compensation to small businesses for the losses incurred while forced to close," he said.
Meanwhile, Chartered Accountants Ireland has said the July stimulus package throws a lifeline to the SME sector.
Dr Brian Keegan, Director of Public Policy, welcomed the extension of the Wage Subsidy Scheme and the Pandemic Unemployment Payment, along with funding for businesses reopening.
"Government has renewed the most effective business relief in the Employment Wage Support Scheme. This approach since March has been the most effective because it leveraged existing structures within the tax system and involved less red tape. Time is key for businesses and the less red tape to navigate, the more time they can spend on salvaging their livelihoods. The approach on commercial rate deferral also reflects this thinking," he said.
Mr Keegan added that while it is good to have additional sources of funding for business, grant aid needs to play a strong role.
"We note in particular the increases to the Restart Grants both in terms of amount and scope. We cannot afford to replace a liquidity crisis with a debt crisis," he added.
According to Mr Keegan, the measures announced will yield dividends for the country in the future, if the spending balance is right.
Ibec, the group that represents Irish business, has strongly welcomed the July Stimulus package.
CEO Danny McCoy said the package is an important step in rebooting the economy.
"Government has taken on board Ibec's extensive inputs over recent months and unveiled a comprehensive package of economic and business supports. It is imperative that the package is now delivered alongside measures that ensure as safe a return to as much economic activity as possible in the coming months," he said.
Mr McCoy called for the various supports to be delivered more efficiently than had been the case to date.
"The suite of financial supports announced today, including the amendments to the Restart Grant and Covid-19 Credit Guarantee scheme, will bring huge relief to businesses who are continuing to overcome the challenges posed by Covid disruption," he said.
He welcomed the extension and expansion in scope of the Wage Subsidy Scheme and the €200m dedicated to retraining those who have been made unemployed over the course of the pandemic.
"Getting those workers who have lost their jobs because of Covid back into the labour market will be a key determinant of the rate of our economic recovery. Such supports must be targeted at those sectors and regions most adversely impacted by Covid."
Mr McCoy said the commitment of €500m to accelerate capital works projects will enable the advancement of regional development, housing and sustainable transport objectives.
However, he added caution that this stimulus package alone will not reboot the economy and should be part of a wider suite of measures aimed at delivering economic recovery.
The organisation representing Irish family-owned businesses has given a cautious welcome to the list of measures.
John McGrane, Executive Director of Family Business Network Ireland welcomed the expansion of the Restart Grant, the extension of the commercial rates waiver and the new payroll supports through the Employee Wage Support Scheme.
"These direct supports provide family owned companies with the cash and breathing space to quickly rebuild their businesses. It is now vital that businesses can quickly access the new cash grants without burdensome administrative barriers being put in place. The new staycation rebate will also provide a much-needed lifeline for hotels and restaurants in the off-peak months," he said.
Mr McGrane said family businesses commend the introduction of the new Stay and Spend tax rebate and the other measures announced for the hospitality and tourism sector, but said the Government must do more.
"The scale of the crisis facing the sector industry requires bold action. To protect the viability of family businesses in the sector, we call on Government to replicate the UK’s decision to reduce VAT for the hospitality sector to 5%," he said.
Retail Excellence has welcomed a number of measures included in the package, but Managing Director, Duncan Graham said he believes more needs to be done to prevent further store closures and job losses in retail.
"We are pleased to see the reduction in the 23% VAT rate to 21% a further write off of commercial rates to the end of September, the extension of the Wage Subsidy scheme to 2021, and a further €8m being allocated for retailers to develop their online presence. Whilst these measures will go some way to help retailers recover, we fear it may not be enough to prevent further stores closures and job losses in the sector," he said.
The Irish Tourism Industry Confederation, the representative body of tourism businesses across Ireland, has welcomed the extension of the Wage Subsidy Scheme and the staycation voucher initiative, but said more needs to be done to protect the sector.
Eoghan O'Mara Walsh, CEO of the ITIC, said Covid-19 has "decimated" the Irish tourism and hospitality industry.
"Although the domestic market is important it can never cover the lost earnings from overseas visitors. As many as 20,000 tourism and hospitality businesses are clinging on by their fingertips and they need wide-scale financial support to prevent significant job losses and business closures particularly in regional Ireland. We are particularly disappointed that the tourism Vat rate was not cut to stimulate demand and put Ireland on a competitive footing with the UK and rest of Europe," he said.
With over three quarters of Ireland's tourism economy made up of international visitation, Mr O'Mara remained critical of the Government's policy on international arrivals.
"In our view, it needs to be completely overhauled. The quarantine rule and green list simply do not work and are wholly inadequate. We urge the government to urgently replace them and implement a comprehensive testing policy so that international tourism can recommence whilst ensuring public health is maintained," he said.
The Restaurants Association of Ireland has said the July Stimulus is "cold comfort" to thousands of restaurants and businesses in the hospitality sector.
The RAI had been calling for the immediate reduction of the tourism and hospitality VAT to 5%.
CEO Adrian Cummins said that businesses in the border region will be forced to compete with the 5% rate in Northern Ireland.
"By not decreasing the Tourism and Hospitality VAT rate today in line with our EU counterparts and closest neighbour today's July Stimulus has put a nail in the coffin for border Restaurant & Hospitality businesses competing with 5% rate in Northern Ireland," he said.
Mr Cummins appealed to the Government to further support businesses in the sector to reopen and to retain employees.
"To ignore immediate legislative issues such as; insurance reform and commercial leases until October's Budget would result in the demise of a significant number of businesses and immediate job losses. I am appealing to the Government to rethink this decision and to support independent tourism and hospitality businesses around the country with a targeted grants package," he said.
The RAI welcomed the extension of the Temporary Wage Subsidy Scheme and the inclusion of seasonal and new businesses.
It also welcomed the additional restart grant, and the decrease in alcohol VAT rate to 21%.
However, Mr Cummins said that without further supports, many local businesses will close permanently.
"If the government fails to act, this lack of support for Irish restaurants could cost the state €2.8 billion over the next 24-month post-Covid-19 period," he added.
Drinks and pub industry
Drinks Ireland, the Licensed Vintners Association and the Vintners Federation of Ireland said the Government's July Stimulus package will deliver a stimulus for some but expressed deeps concern for the 3,500 pubs that remain closed today.
The groups welcomed the provisions in the stimulus plan but said in the context of the current situation where a two tier sector exists in the drinks industry - with some pubs open and others still closed indefinitely - the measures will not deliver.
'The reduction in VAT is a start but we need to consider the reality of the new business model within which pubs are operating - Government guidelines and Covid measures limit the capacity of pubs to trade which means demand is reduced, capacity is significantly decreased and consumers ability to spend in pubs is capped," said Donall O'Keeffe, CEO of LVA.
"Government support needs to be cognisant of this reality and we remain open and willing to engage with government in meaningful consultation in the period ahead to fully consider this employment-intensive, domestic sector," he added.
Padraig Cribben, chief executive of VFI, said that Ireland's publicans are business people, employing over 50,000 people in every corner of Ireland - the real economy.
"While the measures announced are welcome, they are only a start. The temporary reduction in the VAT rate on on-trade alcohol will assist in the short term but it will end. We need to consider the pubs that are closed, we need to get them open and provide support to get people back to work in businesses that are supported to be sustainable in the long term,' he added.
Patricia Callan, Director of Drinks Ireland, said the environment in which the drinks and hospitality industry is operating is abnormal and this is set to continue.
She said the country must look to the Covid measures implemented in the EU and consider their impact while also reviewing the progress of the new measures here.
"This is important ahead of the National Economic Plan in October and in protecting the longer-term viability of Irish pubs as they continue to alter their business model to operate within the confines and realities of Covid in the long term," Ms Callan added.
Chambers Ireland has said the July Stimulus gives "breathing room" for business, but said a long-term strategy for recovery will be needed.
Chief Executive Ian Talbot, said the schemes and funds announced today need to be made immediately available to businesses.
"Ongoing commitments to a Wage Support Scheme, expanded grant aid and liquidity supports are welcome and have formed part of our own priority recommendation to Government in the past several weeks. The tax rebate for tourism will be also provide a welcome stimulus to the sector as it approaches the winter season," he said.
However, Mr Talbot said some of the announcements today may fall short of what is needed.
"Our own data has shown us how deeply impacted businesses in local economies have been because of Covid-19. Many will struggle to pay commercial rates and other bills this year, which will leave local authorities in a very vulnerable position at a time when we need them to be supporting and investing in local economies more than ever," he said.
Private bus and tour operators
The representative body for private bus and coach operators, the Coach Tourism and Transport Council, has welcomed the Government's decision to grant a €10 million business continuity fund for coach tourism operators, but said the measure "falls short" of what is needed to help coach tour operators to stay afloat.
Chairman of the CTTC, John Halpenny, said the amount announced represents just a fraction of what is required.
"While today’s support will help operators in a small way, unquestionably there will be business and job casualties which will have a knock-on impact on scheduled services and school transport provision. It also presents real challenges to the tourism sector because the reduction in the numbers of operators will mean less visitors when fears surrounding the pandemic alleviate," he said.
The association that represents conference organisers has said the Government stimulus plan is "a step forward but not enough."
The Association of Irish Professional Conference Organisers, represents ten companies which organise international conferences in Ireland, and which between them employ 230 event professionals.
The AIPCO said the aim of the July stimulus is to save jobs and get people back to work however it falls short in many areas in its aim to do this.
Ronan Flood, Chairman of AIPCO, said while they welcome the extension of the TWSS and changes to the restart grant, overall they are disappointed with the plan.
"We are disappointed there has been no VAT exemption scheme for our sector. This would offer Ireland the possibility of competing effectively with competitor destinations and would lead to increased employment in the wider tourism sector. We were hoping for the application of a VAT exemption when a local professional conference organiser is used. This would allow Ireland to compete with other countries who are offering this incentive," he said.