Galway Independent Column 2010 - 15 December 2010

After many months of speculation and foreboding the Budget was finally unveiled last Tuesday by the Minister for Finance, Brian Lenihan. Although by the time it was delivered many of the key elements had been either leaked or telegraphed in advance. The Budget speech itself was short and fairly bland, to the point where one tended to think, ’what was all the fuss about’, however, as is often the case the ‘devil was in the detail’. In fact, the Minister referred a number of times to supplementary documents as sources of further details and, needless to say, the National Recovery Plan 2011-2014 was never very far away from his remarks.

When the Budget document, the subsequent Government motions on Budget provisions and the Recovery Plan are all taken together the picture that emerges is not an uplifting one - the macro message ‘€6billion spending power taken out of the economy through spending cuts and increased taxation’. At the micro level this means households having €100, €200, €300 less to spend every month which means less money being spent in shops, on holidays, on entertainment, on the occasional treat, not changing the car, delaying the renovation i.e. a collective tightening of belts across society, which in turns means businesses having less turnover and having to cut costs, and inevitably having to reduce employee numbers which means job losses.

There were a couple of rays of light, however – the surprise announcement that Stamp Duty is being greatly reduced, the rejuvenation of the BES funding scheme for high potential businesses and the extension of the car scrappage scheme. It remains to be seen whether these initiatives will generate much needed confidence but for anyone about to purchase property there is an immediate much welcome benefit. The allocation of additional places on State Training schemes is to be welcomed as it will allow those seeking new employment or employment for the first time to gain valuable experience and new skills to compete for work.

Overall, though, Galway Chamber’s concern is for businesses and for jobs, and last week’s Budget is not good for jobs. Neither was last week’s decision by Galway City Council to vote against a proposal to reduce the €33million rates burden on Galway’s business community by 2.2%, instead opting for a token 1% reduction. The reported reaction of two prominent City Councillors to criticism of this token decision by Galway Chamber and its lobbying partners the Irish Hotels Federation, The Irish Vintners federation and IBEC is not unexpected. What is unexpected is that these Councillors represent political parties that traditionally are pro-enterprise and yet on this occasion when faced with the opportunity to support the owners of businesses who take risks, create jobs, sponsor sports and culture events and help make Galway the tourist attraction that it is, these Councillors and their Party colleagues vote against a meaningful reduction in Rates that could have saved jobs in our community.
Galway Chamber and its lobbying partners make no apology for asking Councillors to help save jobs in Galway.
Note: At the Public Meeting on Rates convened by Galway Chamber and our lobbying Partners and held on Monday December 3rd we were challenged by a number of Councillors to find savings in the Galway City Council’s Draft Budget. A number of costs in the draft document were discussed with Councillors and a number of potential savings were identified. The Councillors were also provided with the output of the Government’s Local Authority Efficiency Review Group which contains five pages of recommendations where savings totalling €544m could be achieved across all Local Authorities, if implemented.
Good News
Galway Chamber welcomes the very good news, released yesterday, that 105 new jobs are to be created in HP at its plant in Ballybrit. It was great to hear the urgency in the voice of Martin Murphy, HP Ireland Managing Director, on the news last evening when he indicated that the jobs were available ‘now’ and anybody interested in applying should send in their CV immediately online – access by googling ‘Jobs at HP’. There is no doubt that this positive job announcement, and the two other announcements in recent weeks which brings to over 300 the total of new jobs in Galway over the last six weeks, was influenced by our 12.5% Corporate Tax Rate – thankfully, it remained unchanged in last week’s Budget and when/if it is challenged by some of our EU partners, Galway Chamber will lobby/lecture and do whatever is necessary to retain this most important weapon in securing future jobs in this country.