Tuesday, 13 October 2015
Retail Ireland, the Ibec group that represents the retail sector, today said the consumer friendly elements of Budget 2016 will provide welcome support to the sector and provide a further boost to the growing retail recovery.
Retail Ireland Director Thomas Burke said: "Cuts to income tax will boost consumer spending and support job creation. The budget will put more money back into people’s pockets, and further support recovery in the sector. The announcement is particularly welcome ahead of the crucial Christmas trading period."
"Consumer spending forecasts released by Retail Ireland only last week showed that this coming Christmas season is anticipated to be the best for Irish retailers in seven years. It is expected that consumers will spend over €4 billion in the month of December, 3.5% ahead of the same period in 2014. Today's Budget will provide consumers with further confidence and help ensure those estimates are realised.
Mr Burke however expressed disappointment at the increase in the minimum wage without any meaningful measures to offset costs for employers. "The minimum wage increase is premature and will disproportionately impact the retail sector, where labour costs make up a large proportion of the cost base. The reduction in employers PRSI, aimed at offsetting the cost for employers, is simply not enough to encourage the creation of new jobs."
Retail Ireland welcomed Budget 2016’s innovative measures to encourage the migration to electronic transactions, including new legal caps on the multilateral interchange fee levied on debit and credit card transactions, currently estimated to cost Irish businesses a combined total of some €40m annually. Eliminating the barriers to the proper functioning of a modern, dynamic and competitive payments landscape will help support the right conditions for growth, investment and job creation. “Encouraging consumers’ use and retailers’ acceptance of electronic transactions over cumbersome and costly cash will save money and time, as Ireland continues its transformation to a cashless society.
Finally, retailers expressed concern around the 50 cent increase in excise on cigarettes. "At a time when black market activity continues to pose a significant threat to legitimate retailers, such an increase without any further deterrent measures will only continue to incentivise such activity," concluded Mr Burke.