Fine Gael has said it will permanently reduce the VAT rate for the food-based hospitality, entertainment and hairdressing sectors to 11%, if returned to government.
However a number of other political parties have come out since, saying that they would approach the VAT issue differently.
Fine Gael party leader Simon Harris said this measure would happen within 100 days of taking office, as the bottom line of many small and medium sized businesses are tight.
The party said it will also introduce a temporary three-year measure to provide a PRSI rebate for businesses with fewer than 50 staff.
Paschal Donohoe promised that Fine Gael would create 300,000 extra jobs over the lifetime of the next government, bringing overall employment to three million.
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Asked why this was not done in the recent Budget Mr Harris said that “we were in a three-way coalition” and it was not possible to achieve in one budget cycle.
But he said the new VAT rate would be “baked into” the fiscal framework for a full term in government.
Mr Donohoe said hotels are excluded because “choices had to be made” but he said that hotels would benefit from the reduction in VAT on the cost of food.
The Fine Gael candidates were speaking at a business policy launch this morning before Mr Harris travels to canvass in the southeast.
Fianna Fáil leader Micheal Martin said he was not opposed in principal to the VAT rate changes, but was concerned such a measure could increase energy prices.
Speaking at the Douglas Shopping Centre in Cork this morning, Fianna Fáil leader Micheál Martin said that the problem with Fine Gael’s VAT proposal is that it has a knock-on effect for small businesses.
“Everyone is concerned about cost of living and fuel prices and energy costs,” he said, and lowering the VAT rate means you have to raise it for other sectors to meet it and this has an impact on small businesses like gyms, he added.
Meanwhile, Sinn Féin’s leader Mary Lou McDonald is in the southeast as her party makes a pitch to voters that it is now time for a government without either Fianna Fáil or Fine Gael.
She accused Fine Gael of making up policy on the back of an envelope and said her party has already committed to reducing the hospitality VAT rate to 9%.
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Ms McDonald said it was extraordinary that Fine Gael was announcing this policy proposal after just passing a Finance Bill.
Ahead of her visit to Waterford, Tipperary, Carlow and Kilkenny, Ms McDonald said that people have an opportunity to vote for what she described as “real choice” and “change” in this election, by voting for Sinn Féin.
Ms McDonald reiterated her party’s preference to see a new government that does not involve Fine Gael or Fianna Fáil, however she has previously stated that she will engage with all parties when it comes to possible coalition negotiations.
The Social Democrats are advocating that, if in government, they would seek to reduce VAT on the food and beverage sector to 9%, but not apply it to accomodation businesses.
Explaining why hotels should be excluded, party leader Holly Cairns said: “A major hotel in Dublin, charging exorbitant rates for rooms, cannot and should not be compared to a small cafe in West Cork.”
She said: “Small hospitality businesses are the backbone of so many of our cities, towns and villages. Regrettably, many of those businesses are now facing closure – with hugely negative impacts on staff, suppliers and the wider community.
Ms Cairns said she accepted that VAT is “a blunt instrument” but added her party’s proposal “… is an emergency measure, designed to get support to businesses quickly, and is necessary to stop the closure of otherwise viable businesses.”
Martin says Fianna Fáil will expand garda force by 5,000
Fianna Fáil leader Micheál Martin also confirmed today that his party will expand the garda force by 5,000, adding that this would be the largest expansion of the gardaí ever.
He said he is meeting people on the street who tell him they are worried about crime and
anti social behaviour.
He said there is a need to expand and resource the gardaí effectively as there is a rising population and to ensure that the perception of safety in our villages and towns is enhanced.
Meanwhile, Labour leader Ivana Bacik and People Before Profit leader Richard Boyd Barrett are set to take part in the national march for Palestine at the Garden of Remembrance in Dublin.
The dominant issues already emerging in this election are housing, the cost of living and the spending of public money.
Political parties and independents have just under three weeks to tell voters about how they plan to improve matters.
Additional reporting Tommy Meskill, Evelyn O’Rourke
