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The association representing coffee shops and other food-led businesses have said the supports do not go far enough. Alamy Stock Photo
Sick Pay

Government to review research on impact of sick pay before making decision on future increases

The review is one of the many measures the Government is taking in its new SME support package.

THE GOVERNMENT IS to review research by the Economic and Social Research Institute (ESRI) on statutory sick leave before making a decision on increasing payments in the future.

One of the first decisions made by Simon Harris after taking over as Taoiseach in April was to pause the expansion of the government’s sick pay scheme in favour of introducing a litany of support measures for small businesses instead.

The government had previously promised to increase statutory sick leave from five to seven days from January 2025 and to 10 days from January 2026.

Today, enterprise minister Peter Burke announced the start of the anticipated small and medium business supports and said that the Government will review research on the impact of statutory sick leave before making a decision on the promised increases.

As part of the business support measures, Burke reopened the increased cost of business scheme, set up after the Budget to assist small businesses with rising costs, for another 14 days.

The innovation grant and the energy efficiency grants have been increased to €10,000, each, with the business contribution rate on the latter grant decreased to 25%.

Businesses in any sector with 50 or more employees will now also be eligible for both the trading online voucher (a €2,500 grant to set up an online store) and the digital business consultancy scheme (an assistance programme for online trading).

Microfinance Ireland loans, for small businesses and start-up ventures, have also been doubled to €50,000.

In tandem with the supports, an online hub for SMEs to access these supports will be established and a ‘best entrepreneur’ programme will be set up to encourage start-up businesses.

Lastly, an enhanced ‘SME test’ research scheme – which assists Government to develop policies that positively impact all businesses, regardless of size – will be developed by the Department of Trade and Employment and the Department of the Taoiseach.

Welcome relief, but crises still remain in hospitality

The Vintners’ Federation of Ireland (VFI), representing pubs outside of Dublin, and the Restaurants Association of Ireland (RAI), representing restaurants, have both welcomed the supports but have said it is not enough to tackle the rising costs in the hospitality sector.

CEO of the RAI, Adrian Cummins, said that the package announced by Burke today will deliver some temporary relief to cafés, restaurants and other food-led businesses, adding “but, put simply, does not go far enough”.

“What our industry wants and deserves is not short-term handouts but long-term viability,” Cummins said. 

He added the increased cost of doing business scheme do not compare to the average costs of running a restaurant, a price tag of €100,000 and said that the Government must reinstate the 9% VAT rate for the industry.

CEO of the VFI Pat Crotty had an equally apprehensive welcome for the supports, citing the same shortcomings of the increased cost of doing business scheme.

Crotty said: “Publicans require meaningful changes to their cost base, such as lowering the standard VAT rate and a reduction in the alcohol excise rate, currently the second highest in Europe.

“If we don’t see a long-term reduction in costs we face the real prospect of a decimated hospitality sector,” he added.

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