Minister for Public Expenditure Paschal Donohoe has fired a warning shot at the hospitality industry over the risk of price-gouging during events such as the Taylor Swift concerts in Dublin in June next year.
Asked about reported room rates in excess of €900 per night for a hotel Mr Donohoe said he takes “pretty seriously” the need for the hospitality sector “to do the right thing by lots of excited fans that are coming to see Taylor Swift play in Ireland”.
Mr Donohoe clashed with hoteliers’ representatives during pre-budget negotiations last year over the impression that some were charging sky-high prices, which damaged consumer interests.
“I have not held back in the past from behaviour I have seen in the hospitality sector at a time when we are trying to get the sector back on its own two feet again, and I think the biggest losers if we see those few nights as an opportunity to make more money ... would be our hotels,” he said.
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Speaking in Dublin on Wednesday, Mr Donohoe also said there is a “powerful case” for caution when spending corporate tax receipts, Minister for Public Expenditure Paschal Donohoe as said, as pre-budget speculation gathers pace.
A rule that effectively seeks to tie core expenditure growth to the estimated sustainable nominal growth rate of the economy, at 5 per cent per year, plays a “really important part” in spending decisions, he said.
The Government introduced the rule in 2021 but departed from it in 2022 for this year’s budget due to the impact of rampant inflation.
“The reason why we have a surplus in the first place is we didn’t spend the excess corporate tax receipts when they came in on ongoing expenditure,” Mr Donohoe said, saying the Government had made a “modest enough” change to the targets for this year.
Mr Donohoe said there is much effort and discussion under way in Government regarding the budget. “I’ll simply say I believe there is a very powerful case for the role of caution with regard to our corporate tax receipts and our spending,” he said.
He said if corporate tax receipts were removed there would be only a small surplus, or none at all. “I believe it is of great importance that we don’t get to the point of spending money that might not always be available to us in decisions that we can only reverse at great social and economic costs,” he said. Mr Donohoe’s note of caution comes as the Central Bank warned the Government that big tax cuts in the budget or spending increases above the 5 per cent spending rule are likely to “add significantly” to inflation and run the risk of overheating the economy.
On the much-discussed issue of Ireland’s security, Mr Donohoe repeated reassurances made by Government figures in recent days that the Coalition has no plans for the Republic to join Nato and was not seeking to make the case for it. “What this agenda is about is making Ireland safer and securer in a world that has become a lot more dangerous, and the only agenda we have is how we do that,” he said.
“The world that we’re now in has become more dangerous, more volatile and more uncertain.”
