BRUTAL BODYBLOW FOR BORDER BUSINESS

25 November 2011 No Comments by The Northern Standard

The intention of Minister for Finance Michael Noonan to add 2% to the VAT rate in December’s Budget is bad news for the businesspeople and shopping public of Co Monaghan and the wider southern Border region.
Minister Noonan’s rationale for the decision is that such a revenue-generating exercise is more preferable than an increase in direct taxation, and that something of the measure’s impact can be mitigated by the exercise of consumer choice.
Certainly any addition to the arduous burden being borne by the PAYE sector would be highly unpalatable and would surely have the consequence of prolonging the gestation period of the recovery the Government is working towards.
But direct taxation is reasonably egalitarian in its effects – the imposition of added VAT to goods and services is not, for a level playing field does not pertain throughout this country from the point of view of commercial trade.
Businesses located in proximity to the Border deal in the volatile stock exchange of differentials between the prices that obtain north and south for fuel and retail products.
Sometimes they profit from this idiosyncrasy of Partition, sometimes they lose out heavily.
Governments have generally left this situation to be regimented by the iron rule of market forces, a dictatorship that has sometimes proven benign and sometimes tyrannical from the perspectives of businesses and consumers in Co Monaghan.
The dominant philosophy seems to be that what is made in the good times will tide you over in the bad, and even when the differentials have been such as to stimulate criminal activity and racketeering a laissez faire approach from the national policy-makers has obtained.
However, at this particular point in the country’s economic story, there are good grounds to urge that some element of discretion be built into the Minister’s VAT plans because of the disproportionate penalty they will inflict on our local economies as we enter into what is for many traders a make-or-break Christmas business season.
The possibility has been mooted that the increase in VAT will not come into effect until January, thus giving the practitioners of Border trade some opportunity to bulwark themselves against its effects by not having their profit margins impacted in the crucial weeks ahead.
This would be a small but perhaps crucial concession for that sector of business in our county whose future viability is perhaps resting upon the level of business that comes through its doors between now and the close of trade on Christmas Eve.
But it will hardly be enough to salvage all the employment that could be lost, and the closure of shop premises that could be wrought, by the exceptionally difficult circumstances that already pertain in the Border region.
The evidence of anecdote and media survey strongly suggests that a significant exodus Northwards has already begun, and it has probably been fuelled to a degree by the disclosure of the VAT increase plan weeks in advance of the Budget itself as a consequence of information received and publicly disseminated by officials of Germany’s federal finance ministry.
This shows the very dangerous game the Government is playing in its rather clumsy attempts to test-drive, and perhaps also to puppeteer, public opinion on its Budget proposals by allowing detail and informed speculation to percolate into the media in advance of the Minister’s formal outline of the plan to the Dáil.
The problem with leaks is that they can often turn into floods – or, in the case of the trade that could flow out of the Co Monaghan area and into the North as a consequence of the VAT decision, a haemorrhage with mortal consequences.
Minister Noonan’s subsequent ‘come clean’ on the matter was made with characteristic candour – but his comments conveyed little or no appreciation of the fact that for the Border region his proposals hold the potential to accentuate very particular localised difficulties that merit much more sensitivity in approach than the VAT revelation embodied.
Those difficulties are of such real magnitude and import for the people of Co Monaghan, in particular its employers and ratepayers, that they also demand the cultivation of a familiarity with the local business landscape that is evidently not possessed by those around the Cabinet table.
Fortunately Cavan/Monaghan has three Dáil Deputies of Government party hue who are perfectly situated to brief the Minister on the degree of severity with which a VAT increase will impact on their constituency.
Things have probably gone too far for the Minister’s hand to be stayed so close to Budget day – but Deputies O’Reilly, Humphreys and Conlan can at least ensure that Mr Noonan and his Cabinet colleagues are made acutely aware of the consequences of their actions.
Perhaps when the New Year dawns and the impact of the VAT increase on Border business communities is glaringly evident, our Deputies and their colleagues in adjacent counties can come together to urge on the Government a package of measures that would assist the commercial sector in our area to survive and perhaps even thrive in 2012.
Hopefully the proven business prudence and resilience of Co Monaghan traders, backed by the support of the local shopping public, will ensure that they survive the brutal bodyblow the VAT-happy Minister is intent on visiting upon them and are still around next year to avail of whatever relief might come their way from their national politicians’ endeavours.

A SHINING EXAMPLE!

There was little sign of VAT-induced morbidity in the centre of Monaghan Town last Sunday when thousands of people assembled for the very spirit-enhancing occasion that was the formal illumination of the county capital’s superb network of Christmas lighting.
While the uncommonly mild weather and the presence of one of the rising stars in the Irish music firmament in the charismatic personage of Monaghan’s own Ryan Sheridan undoubtedly contributed to the huge public turn-out, it is not perhaps unduly romantic to think that the numbers present and the atmosphere generated was a manifestation of Monaghan people’s pride and confidence in their town and its ability to persevere and prosper in even the most adverse of economic circumstances.
The joint efforts of Monaghan’s Town Council and Monaghan’s Chamber of Commerce in galvanising such an outpouring of civic spirit and togetherness are to be highly commended.
As Colr Sean Conlon commented at Monday night’s meeting of the town authority, the partnership approach, when energy is thoroughly channelled, can yield excellent results.
Council Cathaoirleach David Maxwell’s pronouncement that “it was humbling to be from Monaghan” on the occasion also resonates from a demonstration of community togetherness that was literally a shining example in the midst of so much prevailing depression.
Well done to all concerned.

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