The Government's stimulus package does not "go far enough to prevent firms from folding", a former secretary general of the Department of Finance, John Moran, has warned.
“A legacy of unpaid bills, liquidation sales and boarded-up shopfronts in towns and villages across the country remains a real reality, while people dependent on unemployment payments face little hope of finding a new job,” he said.
"Being too frugal at this critical stage is a mistake; we must not be penny wise and pound foolish," said Mr Moran, who is now chief executive of SME Recovery Ireland.
Meanwhile, business leaders have cautiously welcomed the stimulus package, though some have said that its 50 measures do not go far enough to “reboot” the State’s economy.
Twenty-thousand tourism and hospitality jobs are hanging by their fingertips, said Eoghan O'Mara Walsh, chief executive of the Irish Tourism Industry Confederation. "Staycation" tax vouchers will help, but domestic tourism alone cannot replace foreign tourist earnings, and significant job losses in rural Ireland will happen without major supports, he said.
Mr O'Mara Walsh and the Irish Hotels Federation president, Elaina Fitzgerald Kane, agreed that quarantine rules for international tourists are "overly restrictive" and should be "completely overhauled".
Retail Excellence welcomed the reduction in the 23 per cent VAT rate to 21 per cent, the further write-off of commercial rates to the end of September and the extension of the Government’s wage subsidy scheme to 2021.
The extra €8 million to help companies sell online will “ go some way to help retailers recover, we fear it may not be enough to prevent further stores closures and job losses in the sector”, it said.
Growing deficit
The Government will soon face questions about how the State’s growing deficit can be dealt with in the years ahead, said Kevin McLoughlin, head of tax at EY Ireland.
The programme for government has pledged that personal taxes will not rise in the first year of the new Government, but, given the scale of the deficit, tax rises “look increasingly likely” later, he said.
Broadly welcoming the July stimulus, Ibec chief executive Danny McCoy said more must be done to ensure the safe return of people back on to the streets in towns and cities.
The €10 million emergency fund for coach tourism operators is welcome but “falls short”, said John Halpenny, chairman of the Coach Tourism & Transport Council of Ireland.
“Many suffered a colossal drop-off in bookings and cancellations [and] are haemorrhaging millions in overheads every month. This is threatening [their] very survival,” he said.
