10. Deputy Ged Nash asked the Tánaiste and Minister for Finance for an assessment of the full-year cost in 2027 of the reduction in VAT for the hospitality sector to 9%; and if he will make a statement on the matter. [48323/26]

Sentiment score: 0.01

The hospitality VAT rate cut will be introduced from 1 July, next Wednesday. Of course, we all know that for every tax cut there is a consequent cost for the taxpayer. Can the Tánaiste put on the record of the House his assessment of the full-year of this particular VAT cut?

Sentiment score: -0.27

The Tánaiste knows well and acknowledged that we have a difference of opinion on the best way in which we can support those jobs. I firmly believe, and I stand over the position, that this is not the best way to do that and is not the best way to allocate finite public resources in terms of supporting the subsectors of that sector that we are all concerned, that is, the small microenterprises that keep our towns and villages across the country going. In the Labour Party's view, the best way to do that is to target supports from the perspective of energy supports, training, staff retention and, indeed, a wholesale analysis and review of the commercial rates sector. We believe that is the best way to support those companies that we are all concerned about. Of course, there is a consequence for every decision that we take. There was a limited amount of resources available for a tax package last year, and there will be this year and going forward. The impact of making this decision last year meant that there was no indexation of personal tax rates, bands and credits and the Tánaiste has put on the record that is something he wants to address this year. That comes, of course, at a cost too.

Sentiment score: 0.22

Of course it will, and who would not want free money? However, that does not address the structural problems we have in the hospitality sector. We had a VAT rate cut of one form or another in place for the vast majority of the past 15 or 16 years. In fact, the Labour Party helped to introduce that back in 2011 to ensure we could generate some jobs in a sector that could quickly add them, and it absolutely did, as the evidence suggests. However, notwithstanding that there are subsets of the hospitality sector that are in difficulty, there is always churn in the sector more broadly. That is not me being callous about it; that is the reality of business. We cannot continue to permanently support the bottom line of every business. This is a place where we need to have hard conversations with businesses and workers about the finite resources we have. Is this the best way to use the resources we have? We will have little change out of €2.5 billion between now and 2030 from this VAT cut. My only concern is whether this is the best use of public resources, given this is a sector that all the evidence suggests is, thankfully, adding jobs, not losing them.

Sentiment score: 0.06