We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

File image of a restaurant Shutterstock

Government to examine debt repayments following spate of restaurant closures

Tánaiste Micheál Martin said he will look at phased warehoused debt repayments for the industry.

TÁNAISTE MICHEÁL MARTIN has said he will talk to the Finance Minister about structuring warehoused debt repayments for the hospitality sector following a wave of restaurant closures.

Last week, Cork eatery Nash 19 closed after over 30 years in business, with the loss of some 20 jobs.

Adrian Cummins of the Restaurant Association of Ireland (RAI) said he was “shocked and saddened” at the closure of the “Cork institution”.

He called for the government to take “immediate action” and added: “If a long-standing business like this is closing, what hope for the rest of the sector.”

The RAI has said over 280 food-led businesses have closed down in the past six months and that the industry is “facing a crisis”.

It has released what it has called a “five-point plan to save the food-led hospitality industry”.

This includes reinstating the 9% VAT rate and phased warehoused debt repayments, where businesses are allowed to “pay back what they owe over a 10-year period to avoid a tsunami of liquidations”.

Warehousing of tax debt assists businesses who experienced cash-flow and trading difficulties during the Covid-19 pandemic and speaking to reporters in Cork yesterday, Tánaiste Micheál Martin said “that’s certainly something we can look at.”

He also remarked: “I’ll talk to Finance Minister Michael McGrath in respect of that, to see if that can be structured.”

However, he added that it has “already been restructured to some degree in terms of phasing”.

Meanwhile, Martin noted that VAT reductions are “temporary”.

He told reporters: “On VAT, 13.5% was always the VAT rate, it was only during Covid and after the last crash as well, that it’s been temporarily reduced to try and give a kick.”

He also pointed to “problems” with hotels.

“It’s difficult to separate out the restaurants from the hotels,” said Martin.

“That was one of the problems because hotels, when we did bring it down to 9%, a lot of hotels didn’t bring down prices, the prices went up, as we witnessed across many towns and cities if the truth be told.”

Martin added that the government brought in a €250 million package in the budget “as a way of helping businesses generally in the cost of living package to support them”.

“Our objective is to keep businesses open and there was a €250 million allocation made in the cost of living package that accompanied the budget for businesses generally, in terms of grant availability.”

Martin also said that “there has been unprecedented support over the last three years for the hospitality sector, that should be acknowledged”.

“There are undoubtedly difficulties and challenges, particularly because of the most recent inflationary round and that’s without question,” said Martin.

“We will do what we can to help, but I wouldn’t accept any suggestions that we’re not listening, I don’t think that’s valid.”

Martin also said that the government “stepped up to the plate during Covid and provided very substantial resources to the hospitality sector”.

“They are going through a lot of pressure, I think what we’re witnessing is the more long-term effect of Covid.

“Its impact on a whole range of the economy and society has not gone away.”

Your Voice
Readers Comments
This is YOUR comments community. Stay civil, stay constructive, stay on topic. Please familiarise yourself with our comments policy here before taking part.
Leave a Comment
    Submit a report
    Please help us understand how this comment violates our community guidelines.
    Thank you for the feedback
    Your feedback has been sent to our team for review.

    Leave a commentcancel