As Minister Pascal Donoghue stood to the podium on Tuesday for Budget 2024, it was already common knowledge that this would be an attempt at a budget for all, particularly as we look towards a General Election in the new year.
But as economist Jim Power put it at the Waterford Chamber/PwC Budget Breakfast, Speaking post Budget, Gerald Hurley, CEO of Waterford Chamber said: “Everybody will be slightly better off, but nobody will be significantly better off. It is a catch-all budget offering and very much politically motivated.”
Waterford Chamber represents over 600 members across the business community, taking on board their inputs throughout their lobbying agenda, most recently on their pre-Budget submission, which was compiled by Jim Power.
“Listening to our members and representing their voices at Government level is a huge part of what we do at Waterford Chamber. We engaged the services of Jim Power to collate and present the information we gathered in our Pre-Budget submission, and in hindsight, perhaps we were too strategic in our efforts, because this budget was in no way strategic, it was clearly politics at play, leaving the business community more concerned than ever.
“Budget 2024 could be perceived as inflationary. However, Jim did say it would only have a marginal inflationary affect and the reduction in personal taxes are likely to have a neutral to negative affect on the real incomes of lower-income households over the course of 2024. They will raise business costs, while also reducing government income.
“There is no denying there are many welcome measures, but according to our members, once again it falls short on delivering for the business community.”
Reflecting on the Budget, a number of Waterford businesses have expressed their views to Waterford Chamber.
According to Bryan Tynan, Phelan’s Pharmacy, “I welcome measures aimed at easing financial pressures affecting people with their day to day cost of living, but increases in the pension and welfare payments, while welcomed, could have been greater.
“The introduction of mortgage tax relief will hopefully decrease the financial strain on younger couples that have purchased homes, but regretfully there hasn’t been much movement to help people get onto the property ladder. As a parent of two young adults, I welcome the decrease in student fees and the increase in rent relief for those currently renting.
“From a business owner’s perspective, I was extremely disappointed with the increase in health funding. This increase will not cover the extra funding needed to provide a reliable, accessible service for an aging and growing population.
“There had been rumours pre-budget of a rates rebate for smaller businesses to cover the cost of the minimum wage increase, which would be welcomed should it come to pass. Finally, the tax break to encourage angel investors to invest will hopefully help finance the growth of new innovative businesses.”
Tina Darrer of Dooley’s Hotel commented: “We are deeply disappointed with Budget 2024's lack of measures addressing challenges in the tourism and hospitality industry, including rising costs of doing business.
“The failure to address Government-controlled business costs, particularly employers PRSI, is a major concern for labour-intensive industries like tourism and hospitality. A restructuring of employers PRSI with a targeted rebate over the next 36 months could have made a tangible difference, but there was no support in this regard.
“Irish tourism and hospitality businesses have experienced unprecedented increases in operating costs over the last 18 months with no let up in sight, which continue to rise across all areas of the industry.
“The recent increase in tourism VAT to 13.5% will negatively impact the industry, especially regional businesses and those heavily reliant on food services. We absorbed the cost of the vat rate on food but cannot absorb labour costs—the third highest in Europe.
“The IHF had sought a greater commitment from the Government regarding sustainability initiatives, but there was limited movement in this area, while they specifically highlighted the need for funding and support for a dedicated National Hotel Retrofitting Scheme to enhance energy efficiency and the adoption of renewable energy within the sector.”
Meanwhile, Regina Managan, Managing Director of Liberty Blue Estate Agents said: “Attending the Waterford Chamber Budget Breakfast, it was interesting to hear economist Jim Power say that this was a politically manufactured budget. I couldn't agree more - scatter gun economics!
“We have a real emergency in Ireland when it comes to housing. The rental market plays an essential role in providing housing supply. Some 10,500 notices to quit were served to tenants in the first six months of 2023. Initially the tax relief for small property owners seemed positive when figures were first floated yesterday. €3,000 tax relief for 2024 increasing to €4,000 in 2025 and €5,000 for 2026 and 2027. However, when you drill down to the numbers it only translates to relief in the region of €75 per month over this timeline. There is a catch, landlords have to hold onto to their property for four years to avail of this €75 per month. As I understand this €75 monthly tax relief is only available per property owner and may cover multiple units. Sorry, but in my opinion with crippling costs and rising mortgage interest rates, government have failed to price to entice. Small property owners planning to sell will not be incentivised to stay in the market. This gesture will go towards covering a new couch. I am hoping that the Minister for Housing will have something meaningful in the Finance Act.”
Only time will tell the impact of Budget 2024 and as we move towards a General Election, it will be interesting to see if Pascal Donohue’s Budget will have the desired political impact it obviously craved.