The Fine Gael party last week introduced a motion under Private Members time to abolish the disasterously counterproductive Travel Tax introduced in the Oct 2008 budget. The Government are to stand by this Tax, making them almost unique in Europe in their disadvantaging the possibility of a meaningful recovery of our important Tourism business.
The economies of Ireland and the mid-west are suffering to a far greater extent than those of other countries and regions in the global village in which we live. This is due in no small part to the introduction of the travel tax, which came into operation as a result of the fundamentally flawed and rushed budget of October 2008. That budget was presented in a panic by a new Minister for Finance who had not yet found his feet and many of its measures have since been rescinded. The short-sighted imposition of this tax has resulted in a nosedive in the fortunes of Ireland’s tourism sector. Across my own constituency of Clare, businesses have closed down and jobs have been lost in hotels, pubs, bed and breakfasts, shops and restaurants.
Ryanair accounted for nearly 50% of passenger traffic through Shannon Airport in 2007 and nearly 60% in 2008. The low-fares airline transformed Shannon Airport into a major European hub, delivering 1.9 million passengers yearly. The travel tax and airport charges have been cited by Ryanair as its reasons for withdrawing 75% of its business from Shannon. Deputy Timmy Dooley, in his contribution to this debate yesterday, was virtually laughing at Ryanair’s new proposal to deliver 1.2 million passengers if amended terms can be agreed with the airport authority and the travel tax is abolished. Deputy Dooley’s position on this is outrageous. The bottom line is that the region needs this vital traffic.
Time and again, Fianna Fáil has let down Shannon Airport. County Clare simply cannot afford to give the two fingers to any carrier, especially one that has a proven track record of delivering large numbers of passengers. This week the DAA tried to stop the haemorrhaging of passengers from Shannon Airport by advancing a proposal to abolish charges for airlines by charging passengers directly. It is incredible that one Government agency is trying to find ways to save money for airlines while the Department of Finance is refusing to remove a needless tax.
Groups advising the Government, such as the Commission on Taxation and the tourism renewal group, have condemned the tax and Fáilte Ireland, IBEC and the National Competitiveness Council want it abolished. Ryanair boss Michael O’Leary, Aer Lingus CEO Christophe Mueller and CityJet CEO Geoffrey White are all in agreement that this tax must go. Countries like the Netherlands, Spain, Denmark and Greece have either reduced airport taxes or abolished travel taxes. Why can we not do the same in this country?
Yesterday we saw the appointment of Deputy Tony Killeen to the Cabinet and I congratulate him and wish him well. He should use his new powers to advance the interests of the county he was elected to represent. This tax has, in effect, driven the vast majority of Ryanair business from Shannon Airport. That in turn has led to a loss in business, connectivity to Shannon and jobs, which has resulted in a spiral of economic decline. This decline could be halted if those elected in the mid-west region from Clare, Limerick and north Tipperary stand for their region tonight and vote for this Fine Gael motion to abolish this disastrous tax.