Government Announces July Stimulus Package

The Government announced its July Stimulus package yesterday evening. While there are positive aspects to the announcement, we believe that there is more (including non-financial measures) required to maintain city centre businesses in situ. We attach our press release in response to the package.

The measures included in the package include:

·     The TWSS will be extended until September at which time it will migrate to a new Employment Wage Subsidy scheme – which will continue to March 2021. New workers can be added to the scheme. This is a very welcome development.

·     The Restart Grant to be extended to include businesses with 250 employees and also the self-employed. This is something that had been lobbied for by DublinTown.

·     A welcome expansion of the Credit Guarantee Scheme with the Government guaranteeing 80% of the loan.

·     Reduction in standard rate of VAT on clothes and food from 23% VAT rate to 21% from September until the end of February. DublinTown has called for a reduction in the standard rate from 23% to 20% and for the 13.5% rate to be reduced to 10% in our pre-budget submission and will continue advocate for these reductions in VAT.

·     An extension in the rates rebate scheme to September. DublinTown has recommended that this be extended for the remainder of the year.

·     Staycation tax refund of up to €125 on expenditure of €625 from October to April 2021. This is a welcome scheme that will allow us to encourage visits to the city and also weekend breaks where people extend their stay in the city. We would like to have seen it introduced with greater urgency applying from August.

·     There will be a welcome delay in payment of PAYE & VAT which should help business cashflow.

·     The bike to work scheme will be increased from €1,000 to €1,250 and €1,500 for electric bikes. This can be claimed every 4 years rather than the current 5.

·     A €100m employment stimulus package will see 10,000 funded work experience places and recruitment subsidies of €7,500 to €10,000 to hire up to 8,000 people.

·     Grants to take up short duration skills training will double from €500 to €1,000.

·     Employers will receive an incentive of €3,000 to take on apprentices.
“The Government’s July Stimulus Package Will Not Save City Centre Jobs”

DublinTown, the collective voice of businesses in Dublin city centre, has today criticised the government’s July Stimulus package. While the €5bn package announced today is welcome, more needs to be done to address non-financial supports. DublinTown is calling for the Government to address solutions for non-financial support, such as allowing office workers back to work, increases in public transport capacity and targeted sales support to allow increased engagement with the city.

Ireland needs a thriving Dublin city centre to achieve a recovery and according to the representative group, Dublin city centre’s financial sustainability is uncertain. DublinTown believes many city centre businesses will close in September if current circumstances prevail, and others will fail to re-open in January 2021.

Richard Guiney, CEO of DublinTown, said: “The 230,000 people who work in Dublin 1 and 2 are the bedrock of the city’s consumer economy and retail and hospitality businesses are feeling their absence. With people working from home, they are avoiding city centres. This will have a significant economic impact. DublinTown’s members support a phased safe re-introduction of these workers to the office environment.

“DublinTown’s members welcome investment in cycling and pedestrian facilities but also support the National Transport Authority call to increase public transport capacity beyond the current 50%, as people take appropriate responses including wearing face masks. Hand sanitisers should also be available on public transport. Footfall in the city centre currently descends sharply post 7pm. We can increase evening trade if people feel confident that public transport will be available to them. This would avoid the peak period rush and allow for greater trade within the city.

“Surveys undertaken by DublinTown show that between 70-80% of Dubliners would be willing to revisit the city. To achieve this, we need to instil public confidence. The current pedestrian trials need to be extended later into the evening on a seven days a week basis. We need to stimulate trade Monday to Thursday to maximise sales at a time when in-store capacity is limited by social distancing.

“Such measures could dovetail with the announcements in the July stimulus. DublinTown’s members welcome the Staycation Subsidy but fear too many businesses will close in the city before the benefits can be appreciated. Our members also welcome the cut in the main rate of tax from 23% to 21%, but we have been consistently calling on the government to reduce this by a further one percent to 20% – with a 10% VAT rate for hotels, restaurants and hairdressers.

“The extension of the Restart Grant to larger businesses and the self-employed is welcome and the extension of the wage subsidy scheme is necessary, but our members also believe that issues such as the meeting of overhead costs such as rent must also be addressed. The rates rebate must be extended for consumer facing businesses for the remainder of 2020.”

85% of DublinTown’s 2,500 membership are engaged in retail or hospitality and collectively employ 30,000 people as of January 2020. In common with many larger cities around the world, Dublin city has felt the brunt of the economic impact arising from COVID-19. In the week ending 19th of July, city footfall was 53% of the same week in 2019, with average sales in the city centre at 40-45% of 2019 levels.

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Сергей Тарутин

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