The Association calls for action on a number of fronts including tackling the shortage of chefs in the country through the re-establishment of CERT, the former State Tourism Training Agency, which was originally established in 1963 and which was closed down in May 2003.
“The restaurant sector are calling for the immediate re-establishment of CERT which the tourism and hospitality sector held in high esteem while it was operational,” said RAI Chief Executive Adrian Cummins, speaking on the crisis, “It was fit for purpose and serviced the industry with skilled labour during its operational years.”
Currently 1,800 chefs qualify each year from certified culinary training programmes leading to a deficit of 5,000 chef trainees annually, he pointed out.
The present shortage of chefs throughout the country due to the chef training centre shortage has reached crisis point where it will even threaten the success of the tourism industry’s recovery.
The establishment of the 9% VAT rate has created 32,558 jobs in tourism and restaurants, claimed Adrian Cummins. The RAI wants this VAT rate to be retained until 2020 in order for the Irish economy to remain competitive.
“When the economy went into decline restaurants endured falling numbers of diners, rising prices and great financial uncertainty with many having to close their businesses,” he said, “Money generated by this reduced VAT rate however has kick-started a reversal of fortunes.
“Since the VAT cut, employment in the restaurant and tourism sector increased by approximately 22,300 direct jobs with an additional 10,258 indirect jobs which gives a total employment increase of 32,558. This growth will continue if VAT at 9% remains in effect,” he said.
Indeed, the VAT rate remains crucial to the survival of restaurants the length and breadth of the country he believes.
“Restaurateurs are entrepreneurs; the government needs to be reminded of that. When a restaurant opens or expands, they will create several jobs and generate business for the area and their suppliers.”
The Irish restaurant industry employs 72,000 people (one in four tourism jobs) and contributes €2 billion to the Irish economy each year with Irish restaurateurs paying the highest catering wage rate in Europe, he added.
While Ireland has the highest excise duty on wines in Europe, Irish food cost inputs are 18% above the European average too.
The RAI proposes the introduction of a composite system for determining the VAT Rate applicable on dining out ie if food represents more than two-thirds of the total value of a meal, a VAT rate of 9% should apply to the whole meal, it states.
Describing the increase in excise duty in Budget 2014 as “savage” which “crippled many restaurants”, the RAI points out that, “Tourists and Irish consumers compare Irish prices with those in other tourist destinations eg Spain, Italy, Portugal, Greece and Germany where there is no duty on wine.
“Wine served with a meal in a restaurant should attract the rate of 9% VAT applicable to food in restaurants,” stated the submission, “This reduction will impact on excessive unregulated home-drinking as well as encouraging sensible drinking in a regulated environment.”
The RAI is also calling for a lifting of the ban on selling alcohol on Good Friday
National Minimum Wage & Employers’ PRSI
An increase of 50 Cent in the minimum wage will have a disproportionately negative impact on restaurants outside of the Greater Dublin Area, stated the RAI claiming that this will have a devastating effect on the restaurant sector and will lead to cuts in hours and job losses.
The move will mean that “Ireland will have the second-highest minimum wage in Europe after Luxembourg and our competitiveness will be destroyed.
“It’s now vital that employer PRSI is reviewed,” states the submission, “The Low Pay Commission report reveals that at the proposed rate of €9.15 per hour the extra cost for an employer per year is €1,517.70 while the employee will be worse-off by €0.85 when PRSI, tax and USC are taken into account. This must be addressed.”
The RAI proposes that in order to support job creation the most direct way to increase takehome pay is to reduce the excessive burden of taxation and the controversial Universal Social Charge on employees.
It’s calling for a reduction of between 8.5% and 10.75% in the Employers’ PRSI rate for those earning up to €400 per week should there be an increase of 50 Cent in the hourly minimum wage.
In addition, an increase in the national minimum wage will lead to cuts in hours and job losses, but any such minimum wage needs to be accompanied by a widening of the PRSI pay bands for employers.