Tourism sector supports and reopening
Deputy Doherty argues tourism and hospitality have been devastated by Covid-19 and need stronger supports and demand stimulation. The Tánaiste agrees the sector is badly hit, defends public-health restrictions, rejects unlimited stimulus, and says opening pubs with strict distancing might be possible in theory but alcohol makes compliance difficult.
The tourism and hospitality sector supports around 270,000 jobs across the State. Some 68% of those jobs are outside of Dublin and in many parts of the country it is the principal source of economic activity. The sector supports hundreds of thousands of workers, families and communities. It has been one of the hardest hit sectors as a result of Covid-19 and the facts bear that out. In recent months, approximately 92% of all workers in the accommodation and food sector have received the pandemic unemployment payment or have been on the temporary wage subsidy scheme. I appreciate that some of these workers have been able to return to work in recent weeks, and that is to be welcomed, but many more have not.
Many publicans and workers in the pub trade are very disappointed with last night's announcement that the planned reopening on Monday will not now be able to proceed. I appreciate that the decision has not been taken lightly. I know that public health officials are concerned about increased transmission and possible transmission of Covid-19 at this time. We must all be guided by the public health advice in the decisions that we take. However, I think we need to acknowledge that this virus is going to be with us for some time. It is here for the medium term if not the long term and we need to plan accordingly. Has any consideration been given by NPHET to varying the approach to reopening in particular regions? This is an important question. Is consideration being given to allowing pubs to reopen, like restaurants are open now, with all of the restrictions that are in place in terms of table service, social distancing and time limits but without the serving of food? The Minister for Health says there is no concern about restaurants, so could pubs do the same but without food? It strikes me that this could be a way forward in the weeks ahead.
In addition, we need to look seriously at a specific stimulus plan for the tourism and hospitality sector. Such a plan is needed. The Tánaiste may be aware that Sinn Féin recently published a proposal amounting to a stimulus of €860 million to provide every adult in the State with a voucher worth €200 and every child with a voucher worth €100 to be spent in businesses in the tourism and hospitality sector. It would provide a big boost to counties and regions heavily dependent on tourism and hospitality as well as supporting hundreds of thousands of jobs. This plan would also give workers and families a welcome option for a break away or days out after what has been an extraordinarily difficult period. Similar stimulus plans have been introduced around the world. Italy has a similar plan to encourage people to holiday at home. Vienna has given vouchers to residents for restaurants in the city. The US is distributing billions of dollars in stimulus cheques directly to residents. This is a worthy investment in terms of jobs in businesses and in communities. Without that intervention now thousands of jobs could be lost permanently, costing the State considerably more in the long run. The Government is due to publish its July stimulus plan in the coming days. Will this scheme or a similar one be considered as part of the package of measures that will be announced?
Comment on this
I very much agree with Deputy Doherty that the tourism, hospitality and travel sector is a significant part of the economy. A quarter of a million more people are working in that sector, which is very dependent on travel, both international and domestic. It is a sector that was hit hardest first and will probably be affected the longest as a result of this pandemic. While people running pubs and hotels will be very disappointed at the decision the Government took last night they will acknowledge that the decision was taken for good reasons of public health, as Deputy Doherty acknowledged in his contribution.
In terms of how we support these sectors and how we save jobs, different countries will adopt different approaches and when one compares packages one needs to compare them in the round. For example, in the UK, including Northern Ireland where Deputy Doherty's party is in power, the wage subsidy scheme will come to an end in October and instead something is being done with VAT for one month. Our approach may be a different one. We may decide that the best way to protect jobs is to continue the wage subsidy scheme beyond October. When one talks about what different countries do, one has to look at it in the round. The focus that we have taken to date is the wage subsidy scheme, because that is the most effective way to keep people in work and it targets those businesses most affected. We have warehoused tax liabilities and brought in the pandemic unemployment payment for reasons of social solidarity. In the initial phase of this pandemic we made much greater payments than have been the case in other countries, including north of the Border. As well as that, we have waived commercial rates for three months.
In terms of what is planned in the July stimulus, that is not decided yet. It will be decided on Monday, with a view to being published on Tuesday or Wednesday. We are looking at all sorts of different potential actions and I do not want to speculate on them too much here because that may then raise expectations that cannot be met. One of the things we are examining is whether the commercial rates waiver should be continued for a longer period. That saves money for businesses in terms of reducing their costs. We are also considering whether the wage subsidy scheme should be continued and opened to groups of workers that are not currently covered, such as seasonal workers who were not on the payroll back in February. In addition, we are considering whether we should do something about the restart grant. The restart grant has been very beneficial for many businesses, but some did not qualify and, to give the other side of the coin, some correctly pointed out that the restart grant north of the Border is more generous than it is here. These are the kinds of things we are examining.
Comment on this
Later on, Deputy Louise O'Reilly will be launching our proposals that contain all of the measures outlined such as the wage subsidy scheme, the restart grant and rates waivers to support SMEs.
The Tánaiste rightly acknowledged that the tourism sector is the worst hit and it will suffer for the longest as a result of Covid-19. No matter what type of supports we put in we must stimulate demand because 10 million overseas tourists are not coming to the country this year and many of them will not be coming next year. It will not be possible to replace that demand with domestic consumption but we need to try, and a voucher scheme is a way to do that. In my view it is a cost-efficient way to do it as 23% of every euro that is spent in the economy in tourism comes back to the State. The key is to get as many people as possible off the pandemic unemployment payment and back into the tourism, hospitality and accommodation sector.
Comment on this
Could the Tánaiste answer the question on whether pubs could operate like restaurants but without food? We know that a meal in itself, whether it is €9 or €12, is no defence against Covid-19. Is that a potential solution for the future?
Comment on this
I think there is a strong case for putting in place actions that would help to stimulate demand, but we need to be honest with people too. Stimulating demand will be no good to a pub or nightclub that is closed or to a wedding venue that cannot hold weddings for more than 50 people. That approach has its benefits but it also has its limitations. I have no doubt Deputy O'Reilly will produce a very long shopping list of everything that we could do. Up until yesterday she would have said she would pay for it with the money from Apple, but of course we know that kind of stuff is not realistic.
Comment on this
We want to keep borrowing to no more than €30 billion this year. We will take in about €50 billion in tax and we will spend €80 billion. A €30 billion deficit is pretty huge. It may be the biggest we have ever had. We are spending a lot of money. We are borrowing a lot of money. That is the right thing to do but it is wrong to suggest the money is unlimited and one can just do everything on the list. One has to prioritise. It is not credible to produce a very long list every day and to add to it.
Comment on this
In terms of Deputy Doherty's question on pubs, NPHET has not been asked to advise on that. I understand the point the Deputy makes and I think it is a valid one. If we could open pubs with very strict social distancing, that could potentially work. The problem we have seen on a number of occasions is that when people are consuming alcohol, for example in house parties, on the streets or even in restaurants, it is very hard to maintain social distancing. That is a real difficulty. One thing that is fundamental to pubs is that they are ultimately about serving alcohol.