The much-awaited Budget 2021 announced on 14 October included a new Covid Restrictions Support Scheme (CRSS) – but within days Government Ministers created uncertainty as to whether travel agents would be eligible. Clarification is expected this week, if not today then on Thursday 22 October, when the Finance Bill will be published. ITTN asked 13 agents around the country for their reactions.
The Covid Restrictions Support Scheme is for businesses that have been significantly impacted (with at least a 20% reduction in turnover on the corresponding period in 2019), or temporarily closed, and where Level 3 or above restrictions prohibit or restrict access by customers. Cash payments from the Revenue Commissioners as an advance credit for trading expenses for the period of restrictions will be calculated based on 10% of the first €1 million turnover and 5% thereafter, based on the average ex VAT turnover for 2019. The maximum weekly payment will be €5,000 and the scheme will run until 31 March 2021.
On Wednesday 15 October, Tanaiste Leo Varadkar said, on Pat Kenny’s Newstalk radio show, that: “Travel agents will be included in the CRSS support scheme.” However, within days Minister for Finance Paschal Donohoe, on the same show, did not include travel agents – albeit not specifically excluding them. With uncertainty and confusion thus created, the ITAA once again engaged with politicians and civil servants.
But why should such re-engagement have been necessary and why is it taking seven to nine days to obtain clarification on an issue that is so important to the travel trade and its 3,500 employees? It seems that, despite the trade’s best efforts, the industry does not feature highly, if at all, in political leaders’ or civil servants’ thinking. If a multi-national or major Irish company even so much as hinted that 3,000 of its work force in Ireland could be facing redundancy, political party leaders and others would be venting in the Dail and on media within hours. Not so for the travel trade, which has had to rely on vocal support from a few TDs, notably independent TD Michael Lowry.
There is confidence that travel agents WILL be included in the CWSS if/when clarification is received either today or on Thursday – but that it will NOT be backdated for travel agents to March, since when they have remained ‘open’ but receiving little or no income and, on the contrary, having to pay out refunds to clients who booked prior to March (if and when such refunds are forthcoming from airlines).
Responses from Travel Agents
Of the 13 travel agents who responded to ITTN’s request for comment, seven preferred to wait until clarification was received from the Government. The six comments received were as follows:
John Galligan, John Galligan Travel
“My staff and I had been scraping by on the TWSS @ €350 per week, since April. The slashing of wage supports to the EWSS @ €203 per week on 1st September was a major blow to us all and is making it impossible to make ends meet. After all, we are talking about senior, skilled people here with financial commitments like mortgages, creche fees, rent, etc. People who are used to paying their own way and who have never sought state supports before now. How are they supposed to survive on this paltry amount?
“To make things even worse, the permanent civil servants (who have never run a business in their lives) deemed SME owners to be so well off that they were ‘unlikely to need supporting’. That is to say that they recommended that SME owners be excluded from the EWSS altogether! This highlights the frightening ignorance of those who are making such decisions, about what an SME is and what an SME owner makes out of their business. If you are guaranteed an income, regardless of your performance or its consequences, that tends to colour your decision making and settled, secure and pensionable people in the civil service and in government are making decisions about SMEs that they clearly do not understand. That is the most scary part.
“I was delighted to hear that SMEs would be helped by the CRSS scheme. This was lauded by Leo Varadkar and Michael McGrath. However, Paschal Donohoe poo pooed the notion on radio last week. So are the companies worst affected by the Covid pandemic (travel agents) included in the supports or excluded? Is this another instance of muddled communication (now the hallmark of this government) or have the ‘secure pensionables’ decided that we are too well off to need support? At the time of writing this, I have no idea which it is and whether we do have a lifeline or whether we have been screwed by this government excluding us from the scheme.
“Overall, the budget was a great shot in the arm for the country. It is the first time in my 40 years in business that the state has actually helped micro, indigenous Irish SMEs in the service sector. A lot of these supports have come too late to save the many, many jobs already lost in our business. Have they included travel agents or not?”
Alan Lynch, Cruisescapes
“Before the Budget, the vibes were very strong that travel agents would get some form of assistance and Leo’s comment (although I only saw a tweet and did not hear it) seems to have backed this up. Paschal’s comments, which I did hear, didn’t actually say that we were not entitled to it and he gave a fudged answer regarding the EWSS – something along the lines of: ‘the wage subsidy scheme is there to help over 300,000 workers and sectors that are affected by Covid’.
“This was a politician’s response to a question put to him to which he didn’t know the actual answer – much in the same way that if I were asked ‘Does that cabin or hotel room have a kettle in it?’ I would fudge the answer and the client would be pleasantly surprised when they found that there was a kettle in the cabin!
“I am confident that we will be included and will be very surprised and very disappointed if we are not in the CRSS. I also believe there will be a lot of Ministers and TDs who will be shocked if we miss the cut. My understanding is that we will know more on Thursday 22 October when the Finance Bill is published.”
Martin Skelly, Travalue.ie
“There is indeed some confusion. On the face of it the strategy seems to be perfect for us but conflicting comments are a cause for deep concern. I listened back to Paschal’s comments and he didn’t specifically rule us out but he definitely did not include us. The Budget comes into law tomorrow so the interpretation by officials and revenue is critical for us. We are looking for and we need clarification.
“Our businesses have been effectively in Level 5 since March. Our shops and sales platforms are effectively closed due to Government advice and our staff are simply carrying out a maintenance service on existing bookings to protect our customers’ interests. We are subject to the DFA advice on travel and our turnover is down in excess of 80%. Excluding us from the scheme while others are included would seem to fly in the face of natural justice. The future of many travel businesses depends on being included. I can say that the Board of the ITAA have been extremely active, engaging with officials and public representatives to secure our inclusion.”
Mark Clifford, O’Hanrahan Travel
“I understand negotiations are taking place at this minute between the relevant Departments and the ITAA to clarify the situation.
“Confusion reigns in relation to travel agents’ ability to claim under the CRSS scheme announced in the recent Budget. Having read the specifics on the scheme, I cannot see how travel agents can be excluded from the scheme and for many it will mean the difference between permanent closure or survival until international travel resumes. Hopefully, some common sense will prevail and we can all avail of the scheme and prepare for the inevitable surge in business when we get through this pandemic.”
Declan Hughes, FlyCruiseStay.com
“Dithering and disarray is how I would best describe it. The normal line of command would dictate that the Tánaiste’s decision should, by default, over-rule the Finance Minister’s.
“We are not ‘all in this together’ until such time as Government TDs and Ministers are themselves placed on the Covid payment. Travel and tourism has been the worst hit by far, along with events and entertainment, sports, shows, and attractions. The travel industry has been operating at Level 5 since mid to late March and there is no question that we should qualify for special financial dispensation in the form of a non-repayable grant.
“Travel has not been the main cause of infections and we need to open up air routes again – it is such a pity that so much time has been lost over the summer months. As a trade we do not accentuate enough about how beneficial travel can be to improve overall mental health and physical wellness.”
Emma Kilkelly, Kilkelly Travel
“Like all communication coming from the government at the moment, it is totally confusing. We are waiting for further clarification on this tomorrow.”