Lisa Chambers (Fianna Fail) | Oireachtas source

I welcome the Minister and congratulate him on his elevation to a senior Cabinet position. I wish him well in the time ahead.

I welcome this debate on the cost of doing business. There has been a particular focus, and rightly so, on small and medium enterprises because that is where the pinch is being felt the most. It would be remiss of me not to mention the report that is out today. It was commissioned by the Restaurant Association of Ireland and compiled by Jim Power Economics. The report states that the Irish economy could lose up to €288 million annually as a result of the closure of over 200 restaurants, cafés and other food-led businesses. In the part of the country where I live in County Mayo, a rural area with a thriving tourism offering, food-led businesses are a huge employer and are part of the structure around our tourism offering. They are struggling with the cost of running their businesses. I know the Minister is well aware of this. Businesses want to do the right thing. They welcome the changes we have made regarding the minimum wage increase because they know it is the right thing to do. They know that statutory sick leave and auto-enrolment are the right things to do. They want to work with us, but they are finding this a lot to deal with in one go. The increased cost of doing business grant provides up to €5,000 to a business, but €5,000 is kind of scratching the surface for many of these businesses in view of all they have had to deal with.

I was canvassing recently in Mayo and Roscommon. In two separate locations, two supermarkets - I will not name the retailer, but it is a large supermarket providing huge employment in a labour-heavy business due to the type of service it provides - said that while they understand the increase in the minimum wage and the need for it, if it were to go any higher, they would certainly look at increasing automation and putting in place more machines to do the jobs of the people they currently have on the shop floor. We have to take that seriously and be mindful of the long-term impacts of these changes in order to ensure that we do not make it difficult to create and sustain jobs and that machines and automation will not replace people in these sectors. We must be mindful that the margins of these businesses are fairly tight and that every increase we impose just eats further into those margins.

The cost of energy is another matter that arises. We know that energy costs have been a huge challenge for businesses. While they acknowledge that these costs have come down significantly, they are still very high. They are concerned about global conflicts, like the continued war in Ukraine and what is happening in the Middle East, the impact on the supply chain and whether we are going to see another significant increase maybe next year or the year ahead. They are concerned about this. On that front, they would like more supports in the context of installing solar panels to benefit from renewable energy and to keep their costs down. In terms of the costs involved in this regard, one supermarket was quoted €140,000 to put solar panels on its roofs. It would take it probably ten to 15 years just to pay back the cost of installation. We need to look at that in the context of making what I refer to viable for these businesses. Not only does it help reduce their business costs, we also must be cognisant that we have carbon reduction targets to meet by 2030 and 2050. We need to incentivise businesses to take up these measures. Clearly, what we are offering by way of grants to businesses is not making it attractive enough at this point.

I want to speak to the commercial rates issue, which I have raised previously in this Chamber. We need to look at how we fund local government. I know the Minister was previously in that brief. It is currently not a runner for the county councils in Mayo, Galway, Roscommon, Donegal or Sligo to reduce rates because they use the moneys raised to fund local government. If one looks at commercial vacancy rates in parts of the country, one in five commercial premises in Galway city is sitting vacant. In Mayo and Roscommon, the rate is 17.4%. In Donegal, it is 18.2%. That it is in stark contrast to the national average, which is 14.3%. In Meath and Wexford, the rate is 10% and it is 12.2% in Cork. There is a regional imbalance there. We have higher rates of commercial vacancies in the western region than anywhere else in the country and it is far above the national average. We have to look at how we incentivise people to set up shops, particularly as they are competing with those in the online space. We need to present a new vision and ambition for our town and city centres in order that it is not just charity, vape and coffee shops that are operating on our high streets. We need to see how we can incentivise retail premises to operate in our town and city centres, taking into account that, as the Minister mentioned, they are competing with the online space. Online retailers do not have the same overheads. They do not have to pay the same insurance costs or commercial rates, nor do they have to pay rent. How do we level the playing pitch for physical shops in order that they can compete with online retailers? We want the main streets in Castlebar, Sligo town and Galway city full of shops. In order to do that, we need to look at the overheads businesses have and how we can level the playing pitch to allow them to compete with online retailers and keep our towns and city centres vibrant.

There are many issues to deal with in terms of the cost of business. I look forward to the Minister's response and thank him for being here for the debate.