Budget 2025: Cork businesses have anxious wait on s

BUSINESSES in Cork will have all eyes on this year’s budget announcement on October 1, with those in the hospitality industry, in particular, hoping for s that will allow them to keep their doors open into next year.

Budget 2025 will be delivered by Finance Minister Jack Chambers next week and will set out the Government’s spending for the year ahead.

It will see a total of €105.4 billion in expenditure being made available, an additional €6.9 billion compared to last year.

There is a lot of pressure from the hospitality sector for the 13.5% Vat rate to be cut to 9% as was the case during the pandemic and to look at the effects of a wage increase on employers within the sector.

Earlier this summer, Irish Tourism Industry Confederation (ITIC), Restaurants Association of Ireland (RAI), Vintners Federation of Ireland (VFI), Irish Hotels Federation (IHF) and Licensed Vintners Association (LVA) released a t statement calling on the government to commit to reinstating the 9% rate of Vat on food-related services.

The organisations said it is “essential” that last September’s Vat increase be revisited in the budget given the severe impact it is having on hospitality businesses, many of which they said are facing “enormous financial pressures”.

“These businesses are now at a crossroads, struggling to deal with very tight margins and reduced profitability due to ever-increasing operating costs,” the statement read.

The Cork Business Association (CBA) and Cork Chamber have also set out what commitments they want to see made for Cork in Budget 2025.

The CBA has called on the government to reduce the Vat rate for food-related hospitality services to prevent further closures and economic fallout.

The CBA said it s a living wage for all workers but recognises that small businesses are most affected by wage increases and asked that if the government continues with minimum wage increases, that they consider a funding mechanism for small businesses to be able to afford this.

The organisation has also called for a review of employers PRSI increases and their impact on SMEs; funding for additional security measures in the city centre; a tax credit for businesses with profits of €100k or less; changes to promote investment in small Irish companies; increasing the private pension threshold and maintaining current taxation rules for stability; a re-introduction of the Living Over the Shop scheme; and maintaining or improving current reliefs to the transfer of businesses to the next generation.

Cork Chamber recently met with Minister for Finance Jack Chambers as part of the Minister’s visit to Cork where Chamber representatives from across the Cork region and key sectors discussed the current business landscape in Cork and key priorities for Budget 2025.

The key business priorities for Budget 2025 identified by Cork Chamber are housing, competitiveness, infrastructure investment, renewables and urban evolution. The Chamber also called on the Government to prioritise investment in skills and talent, and promoting social and environmental sustainability.

CEO of Cork Chamber Conor Healy described the Cork city region as a key contributor to the economy and said the region offers immense opportunity for future growth.

“We urge the government to implement Urban Evolution Deals, which would provide dedicated funding for local authorities, allowing them to allocate resources in ways that best address their unique needs. This approach will empower cities to capitalise on local assets, foster sustainable growth, and transform city-centre living into a reality,” he said.

Meanwhile, Taoiseach Simon Harris has said that Budget 2025 will contain a cost-of-living package for households. It has been reported that the cost-of-living package will be worth about €1.5 billion.

Ministers indicated a one-off energy payments, a double child benefit payment before Christmas, and an expansion of the qualification for the Fuel Allowance can be expected.

‘Without for hospitality industry in the budget we will see more closures’

The hospitality industry has put pressure on the government to deliver a business-friendly budget that will the industry and prevent further closures.

Cork has lost some well-known and popular pubs and restaurants in recent years and employers within the industry have warned that s such as lower Vat rates and a reduction of the excise duty on alcohol is needed to prevent further closures.

Speaking to The Echo ahead of next Tuesday’s budget announcement, president-elect of the Vintners Federation of Ireland (VFI) and owner of the Castle Inn in the city centre, Michael O'Donovan said it is inevitable that more businesses within the industry will close their doors if the government does not listen to their needs.

“If businesses are running with a 1% margin of profit and if their turnover falls any bit, they’re in big trouble. It has come down a bit, but electricity and gas prices are still at an all-time high. So, we’re at the mercy of a lot of companies and those costs are much higher than what they were five or six years ago for our utilities and if there’s any change in them it puts extra pressures on businesses,” he said.

“It’s inevitable that if the government doesn't the industry in this budget, we will see more closures.” Mr O’Donovan said that there will be a knock-on effect if the hospitality sector is not ed going forward.

“There’s a lot of talk about a lot of people moving to pharma and tech and we’re a very attractive country for them because we have a very highly educated workforce but you have to that people like to socialise as well and these companies like their employees to be happy and be able to go out and enjoy themselves and if we see bars and restaurants disappearing, it's less attractive because people won't be able to have the recreation that they would like to have.

“We’ve seen lots of bars closing Monday to Wednesday or a day or two out of those days and people are less inclined to go out on those days but for people working shift work, that might be their weekend on a Monday and Tuesday.

“We have to be conscious that it's the big wheel of . We’re all here to work together and it's our economy that makes our country a strong and attractive place but if we start losing one piece of our economy in the hospitality sector, it won't be long before others find it difficult to come here.” Setting out what the industry is calling for in the budget, Mr O’Donvan said a reduction of the excise duty on alcohol, a reduction on Vat for food only, and wage increases need to be looked at.

“Firstly, it would be to reduce the excise duty on alcohol. We are the second highest in Europe. We’re asking the Minister for Finance to reduce it by 15% over two years. So that’s 7.5% this year and 7.5% next year. We contribute a lot of money to the exchequer in Vat receipts and excise so this would cost just over €90 million a year to do this so it would be a help for our industry.

“Secondly, would be the Vat rates. The 23% Vat rate that we currently have on all goods and services was always meant to be a temporary measure introduced by Michael Noonan 12 years ago when we were in financial difficulty. Now that the country is running a surplus on our budgets, we should be looking to reduce this Vat rate and it would help everybody in every industry but it would give hospitality, especially those doing alcohol, a huge boost. And the 13.5% Vat on food, we would like to see that reduced back down to 9% for food only.

“One of the big costs that we’ve heard travelling the country and listening to , is the costs that have been put upon us by the government, especially the minimum wage. They’re talking again about increasing it and while we have no issue with an increase, it’s the level of increase that is the hard part.

“The final thing would be employers' PRSI which has been set at a high rate for the last number of years. We would ask them to look at it because it is a direct hit on businesses. When you’re paying your employers’ PRSI and you’re also asked to pay for sick days, it feels like it's double taxation on employing someone.”

CBA’s budget proposals look to alleviate financial issues

Cork Business Association (CBA) has outlined its asks of the Government ahead of Budget 2025, highlighting what s their in Cork hope to see announced.

The CBA submitted a detailed budget proposal to the Government before the summer to address the mounting challenges faced by local businesses, particularly in the hospitality sector.

President of the CBA, Aaron Mansworth, vice president and secretary Dave O’Brien, along with executives and , outlined critical measures needed to alleviate the financial pressures that have led to unprecedented closures and economic strain in the first half of 2024.

The key points of the CBA pre-budget submission include cost of doing business; PRSI; Vat; security; Benefit in Kind (BIK); Small Business Tax Credit; Pensions and Capital Gains Tax (CGT) Retirement Relief; Capital Acquisitions Tax; and housing and infrastructure.

Speaking to The Echo ahead of the budget announcement, president of the CBA Aaron Mansworth, who is the managing director of Trigon Hotels in Cork, said: “The year to date has been challenging, especially for the hospitality sector. The issues around increased Vat rates, minimum wage hikes, and debt warehousing repayments have placed immense strain on businesses.

“While the Government has delayed some additional costs, the impending expenses are still looming, and we urge the government to develop a long-term plan to ensure the survival of businesses in affected sectors.

“The issues around increased Vat rates, minimum wage hikes, and debt warehousing repayments have placed immense strain on businesses.

“While the Government has delayed some additional costs, the impending expenses are still looming, and we urge the government to develop a long-term plan to ensure the survival of businesses in affected sectors.”

The CBA has said that while it s a living wage for all workers in Ireland, it recognises that small businesses are most affected by wage increases.

With payroll margins in hospitality up by about 10% since covid-19, the CBA is requesting that if the government continues with minimum wage increases, they consider a funding mechanism for small businesses to be able to afford this.

The CBA has requested a review of employers’ PRSI increases and their impact on SMEs and grants and reductions in PRSI rates to counterbalance the costs of auto-enrolment in pension schemes.

The organisation advocates for a reduction in the Vat rate for food-related hospitality services to prevent further closures and economic fallout.

The CBA has highlighted the urgent need for government funding for additional security measures in Cork city and has asked that the Government legislate that all staff entertainment is not subject to BIK, aiding SMEs in attracting and retaining talent.

It has also proposed a tax credit for businesses with profits of €100k or less, offering a refund of 30% of employers’ PRSI paid, capped at €30k, for businesses in the tourism sector.

Changes to promote investment in small Irish companies and reduce restrictions on qualifying companies has also been suggested by the organisation, as well as a call for maintaining or improving current reliefs to the transfer of businesses to the next generation.

The business organisation has also suggested increasing the private pension threshold and maintaining current taxation rules for stability and has proposed a re-introduction of the Living Over the Shop scheme and tax incentives for landlords and developers to address housing shortages.

Lastly, the CBA has urged a commitment to key infrastructure projects, including the events centre and light rail.

Chamber spells out its priorities to minister

Cork Chamber recently set out its priorities for Budget 2025 during a meeting with Finance Minister Jack Chambers as part of his visit to Cork.

The organisation’s priorities for Budget 2025 are housing, competitiveness, infrastructure investment, renewables, and urban evolution.

The Chamber has also called on the Government to prioritise investment in skills and talent, and promoting social and environmental sustainability.

Speaking to The Echo ahead of next week’s budget announcement, the CEO of Cork Chamber Conor Healy said the Chamber has outlined four critical areas where immediate action is needed.

“Our pre-budget submission is clear: The Government must act swiftly and decisively in Budget 2025,” he said.

“We’ve outlined four critical areas where immediate action is needed — housing and infrastructure, enterprise innovation, skills development, and social and environmental sustainability.

“These are not just aspirations; they are essential pillars for Cork’s future competitiveness and for the broader Irish economy,” Mr Healy said.

Speaking about the meeting held earlier this month with Finance Minister Jack Chambers, Mr Healy said: “I would say the meeting was productive and we are keen to see that Budget 2025 will take the right measures to ensure our economy remains strong and that it grows sustainably.”

Mr Healy said that Cork has already seen significant change driven by the impacts of the pandemic and other global challenges but said cities and towns continue to evolve and that the question is how we respond.

“We can’t afford to be ive — government and local authorities need to act with urgency,” he said.

On the Chamber’s proposal for ‘Urban Evolution Deals,’ Mr Healy said: “These bespoke agreements between central government and local authorities are vital if we’re to reinvigorate our towns and cities.

“Sustainable urban development, enhanced living environments, and stronger social cohesion — these are the outcomes we should be striving for. Cork, as Ireland’s fastest-growing city, is central to this mission. It’s not just about Cork’s future; it’s about Ireland’s future competitiveness on a global stage.”

Mr Healy also stressed the need for action on infrastructure and said investment in housing and critical infrastructure must be at the forefront of Budget 2025.

“Cork’s key projects — from the long-awaited light rail to the events centre — cannot be delayed any longer. These projects are vital to the economic, social, and cultural future of our city. The time to act is now.”

Calling for collaboration, Mr Healy described Budget 2025 as a once-in-a-generation opportunity to ensure cities and towns evolve in a way that benefits future generations.

“Creating synergies between government, local authorities, utilities, developers, and local businesses must be a top priority,” he said.

“Our urban centres are the lifeblood of the Irish economy — we cannot miss this opportunity to drive sustainable and positive change.”

Cost-of-living aid in budget ‘to be €1.5bn’

The cost-of-living crisis is one of the main areas of concern ahead of Budget 2025, with a package for households worth about €1.5bn expected to be announced next week.

Ahead of the budget announcement on October 1, ministers have indicated that one-off energy payments, a double child-benefit payment before Christmas, and an expansion of the qualification for the fuel allowance can be expected.

Speaking to The Echo, local public representatives have raised concerns about how their constituents are struggling in an economy of increased costs of food, fuel, and energy bills.

Solidarity-People Before Profit Cork North Central TD Mick Barry, said: “Poverty isn’t once-off. Low pay isn’t once off. Energy credits and other cost-of-living protections need to be factored in to the basic rates for pensions and social-welfare entitlements going forward.

“The minimum rate during covid was €350. Why should minimum rates be lower than that now? Electricity prices should be lowered by instructing the ESB to operate on a break-even basis.

“The price of groceries should be lowered by setting maximum prices with price-control legislation. And a new wage floor should be set by raising the minimum wage to €17 per hour.”

Labour Party councillor for Cork City South East Peter Horgan said the cost of childcare is a major concern for his constituents.

“One massive, radical cost-of-living introduction would be the introduction of fully state-funded public childcare,” he said.

“Move all early-years staff and providers into the Department of Education and pay them as the educators they are. Any provider that doesn’t want to enter the public system can opt out and let the market decide their costs and income.

“It would professionalise further the early-years educators and benefit thousands of families across the country and especially in Cork.

“The Department of Education has the structure in place already from primary level and such a move would surely have wide cross party . It’s something that benefits all stakeholders in early years.”

Independent Ireland councillor for Cork City North East Ken O’Flynn said that those most impacted by the cost-of-living crisis are young people who are trying to save for a deposit to buy a home.

“People are reporting to me continuously the savage rent increases that they’ve experienced in the last two years,” he said.

Mr O’Flynn said that people are having to choose between paying an electric bill or gas bill and having food in the cupboard.

“People are finding it very, very tough. People who have never found it tough before are finding it difficult now,” he said.

“Going into the shops has become more expensive. It doesn’t seem to reflect a 1% or 2% increase in the shops, it seems to be 20% to 30% of some items. There are certainly times where we go from month to month and see a significant jump in prices. I think that needs to be looked at as well, the competition in our State.

“Really, how people are mainly affected in my constituency is the day to day and that’s making the decision between paying electricity bills, paying gas bills, or buying food for your children.

“People are finding it extremely tough. You’re doing your shopping and you’re looking into your trolley wondering what you paid €200 for.”