As we near the budget announcement next week, there is no doubt about the demands on the Government with the cost-of-living crisis, with families and the elderly severely squeezed financially at this time. Tillage and dairy farmers are under enormous pressure. Independent Ireland has also called for the abolition of the carer's means test.

One thing Independent Ireland has called for in the past two years is to bring the VAT rate from 13.5% to 9% for the hospitality sector. That was the rate until September 2023. This sector is under enormous pressure as cafés and restaurants throughout the country are losing money on a daily basis. In 2024, 600 cafés and similar food establishments closed their doors. Also under enormous pressure are restaurants, most of which close four or five days per week as it is too costly to open their doors. Everywhere I go, whether it is Dublin, Galway, Wexford or west Cork, the cry is the same; the VAT rate has to drop or the doors will shut. One café owner told me at the end of July that the first time he had made a profit to pay himself was two weeks earlier. He had been open since January this year. He knows it is curtains for his business.

The crisis the sector is in now is that the new VAT rate drop, if it comes, will not go to customers as a reduction. It will just help to pay bills, such as energy bills, that have spiralled out of control. It is the same for restaurants, which in most of the country are closed for most of the week as they suffer too many losses if the doors are open seven days per week. This Government has promised a drop in the VAT rate for these businesses for the past year or so and it cannot be kicked down the road any longer. We cannot allow these small, but effective businesses that are employing ten, and in some cases up to 20, local people, including young people and students, just to shut their doors. These businesses are not asking for handouts. They pay rates, electricity, oil and rubbish bills; they have staffing costs; they have to pay PRSI; they pay for insurance and maintenance; and they purchase stock. Lately, a new charge has been levied by the councils for outdoor seating. All this and then they are expected to turn a profit. This has turned dream cafés and food outlets into nightmare adventures.

In recent media reports, I have heard the Labour Party, the Social Democrats and People Before Profit all say they will hit out at the Government if it considers a drop in the VAT rate to 9%. Independent Ireland stands by these businesses as we are in touch with these people on the ground. We know the exact difficulties they are going through. Before the last election, Government TDs promised an immediate drop in the VAT rate. Will the Taoiseach clearly tell the House today that the Government is still committed to dropping the VAT rate from 13.5% to 9% in next week's budget, effective immediately? If not - if it tries to kick the can down the road - it will lead to hundreds of cafés and restaurants closing their doors for good this winter.

I thank the Deputy for raising what is a very important issue for a very significant industry in the country. He spoke eloquently about the west Cork experience. As he will know, the Minister of State, Deputy O’Sullivan, has been hounding me on this issue, as has the Minister, Deputy Foley, from the Kerry perspective. All the counties where hospitality is particularly strong in the summer period have been strong advocates for an initiative along the lines of the one the Deputy is proposing. The budget will be an investment in the future of the country. The first phase of that was announced in the national development plan in terms of infrastructure, water, electricity, energy, public transport, road transport and digital health. These are fundamentals that simply have to happen for the future of the country. The other area is competitiveness, stronger investment in research and development and also competitiveness of certain sectors like hospitality.

The Department of Enterprise, Tourism and Employment did a study over a year ago on the impact of increased labour costs and increased costs generally on small businesses. It was accepted that the hospitality sector bore the brunt of many of the extra costs such as the bank holiday cost, the additional sick leave, the minimum wage increases and the approximation to the living wage, and found them difficult to absorb. That is well documented in the Department of Enterprise, Tourism and Employment’s document. The Restaurant Association of Ireland commissioned the economist Anthony Foley to do some work on the correlation between reduced VAT rates in the past and job creation in a specific sector. A lot of work has been done on that.

I am not in a position to indicate what will actually happen on budget day itself but I recognise that this is a very important issue. In the context of the global situation - the turbulence, the tariffs and all of that - investment in infrastructure is key. We are putting a lot of money aside too. By the end of next year, there will be €22 billion in our Future Ireland Fund. That is a substantial fund despite what is being said about our being reckless with the public finances. We are putting substantial amounts of money to one side but we want to maintain competitiveness in domestic industries such as the hospitality sector. We will certainly be examining all of the issues the Deputy has identified.

I think we need a bit of perspective in the debate as well. I am not quite sure everything in some of these establishments is nightmarish. I spent a few evenings in west Cork. I had better be careful what I say. I was not able to participate in any lock-ins for obvious reasons, but that might be what is behind the Deputy’s reference to nightmarish experiences the following day. It was a very pleasant experience. People need a break in terms of viability and that is where we are focused.

I thank the Taoiseach. As he will know from his holidays in west Cork or elsewhere, when there is a huge influx of people, there is a bonus from that but the problem is that the bonus does not last. If you go past a café today, there might be two or three people sitting outside it. It is during the busier times that they make their little bit of profit. The proof is in the experience of the business person I mentioned earlier, who opened a café in January and had to wait until the end of July to get an income for himself. That says it all. He spent the previous seven months earning nothing but paying staff, rates and everything. He obviously had a dream that this business would last and survive, but his dream is turning into a nightmare.

As I said earlier, 600 of these businesses went last year and another 150 went in the first three months of this year. If they are employing 15 people on average, it means that up to 11,250 people have lost their jobs, with thousands more jobs to go if the Government does not step in. Next week, this Government has a chance to drop the VAT rate immediately. Will the Taoiseach tell us if this will happen on the day the budget is announced? If he is going to tell us he is kicking the can down the road, it will lead to hundreds and hundreds more closures.

I understand the issue the Deputy is raising. The costs increased significantly for the sector. I acknowledge that. The data we are getting in is not showing any significant decline in employment, but there could be churn. Some people could be in difficulty while other new businesses are established and opened. We want long-term sustainability for the industry and the hospitality sector. You could have a crowded restaurant but the margins might not be great when it comes to the owner’s bottom line. A lot of hard work goes into this industry and maybe the yield has not been what the hard work would deserve in terms of margins and so on.

We are looking at viability in a number of sectors. More generally in terms of the budget itself, Deputy Collins understands that I cannot announce the budget today as it is not the norm. The Deputy's representations are heard, along with those of his colleagues. Although it applies to both urban and rural Ireland, there is no doubt there are certain counties, particularly given the seasonal nature of rural Ireland and holiday areas, such as west Cork, Kerry and the west of Ireland, where it is a significant issue.