Retail Ireland, the Ibec group that represents the retail sector, gave its reaction to the publication of the Government’s budget for 2017. The industry group welcomed elements of Budget 2017 that will increase disposable income and support consumer spending, but said more could have been done to support retailers under pressures from a high cost base and acute currency pressures.
Among the items in the budget, it considers the new Town Centre Regeneration Fund ‘timely and very welcome’, but expressed disappointment over what it perceives as a ‘failure to tackle business costs and deliver e-commerce supports’ in the Government’s financial plan.
Retail Ireland Director Thomas Burke said: “The sterling drop has intensified the pressure on retailers from competitors in Northern Ireland and UK-based online retailers. Retailers had hoped for a more comprehensive response in today's budget. Over the coming weeks new measures will be required to support the competitiveness of Irish businesses most exposed to Brexit pressures.”
Another item which the group voiced disappointment with was the further increase to the National Minimum Wage, which received a 50 cent (6%) increase in January of this year. “This latest increase will further increase the disparity in employment costs between retailers in the Republic and those in Northern Ireland where the minimum wage is now 13% lower,” Mr Burke said.
“Given the recommendation from the Low Pay Commission to further increase the National Minimum Wage, we had hoped Government would introduce measures to offset the increase in associated employment costs such as reducing employers PRSI to its previous 4.25% level. It is disappointing that they have decided against this.”
Although pleased with the Town Centre Regeneration Fund, Retail Ireland also expressed dissatisfaction with the Government’s decision not to introduce measures to incentivise the migration of Irish retailers into the ecommerce channel through a proposed tax credit. “This is a measure which we will continue to pursue with Government over the coming months. The online space is one of great opportunity for Irish retailers and there is a significant win for the exchequer also should we manage to retain some of the 70% of trade which currently leaves Ireland to foreign based websites,” Mr Burke remarked.
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