Speaking during the Pre Budget Debate – Breen urges Finance Minister to axe the Travel Tax.

November 24th, 2009 - Pat Breen

Deputy Pat Breen: I wish to share my time with Deputies Neville, Creed and Clune.
Given the limited time I have, I wish to speak on only one issue, which is the air travel tax. Since it was introduced by the Government in last year’s budget it has left a trail of destruction. Even in July, the height of the summer season, trips abroad by Irish residents were down 11.3% compared to 2008, while the number of overseas visitors to Ireland fell by 9.1% in the same period. Meanwhile, US Airways, Delta Airlines and CityJet have all left Shannon Airport. However, the trail of destruction does not stop there.
The tax is counterproductive. While it may have brought in about €60 million up to the end of September, how much revenue has been lost to the Exchequer as a result of its introduction? Defending the introduction of the tax, the Minister of Finance said that our UK neighbour also has a travel tax. However, the Minister needs to get real. We cannot compare ourselves to the UK. Around 61 million people every year use London Heathrow Airport, which is an international hub serving the whole world. Ireland is an island nation which is very much dependent on air access, and our economy is dependent on tourism.
The reduction in visitor numbers to Ireland means lost bed nights for hotels and bed and breakfasts. It means less VAT for the Exchequer because of falling revenues and less money being spent on tourist attractions, car hire and so on. Everybody is hit by it, from the taxi driver who picks up passengers at the airport to the local shopkeeper. It has a major knock-on effect. When the year-end figures are published in the new year they will reflect another significant decline in passenger numbers at our airports. It looks highly likely that Ryanair will not do a deal with Shannon Airport Authority and will base just one aircraft at the airport, with the loss of hundreds of jobs and an increase in the number on social welfare. I am concerned that Ryanair will simply leave and attempt to increase its traffic at UK destinations. I ask the Minister of State, Deputy Haughey, to imagine the devastating effect this would have on the region.
The Minister for Finance cannot ignore the situation. Airlines, airports, the tourism sector, hotels and even the Government’s own tourism strategy group have joined forces to condemn this tax. I am tired of listening to the same old rhetoric that the Government cannot intervene in aviation matters. This is the one area of which the Minister for Finance has control and for which he has the solution in his own hands. If the economy in the mid-west region is to get back on its feet, the Minister must axe the tax. The ball is in his court. I ask him not to score another own goal but to give the airports a break. A compromise must be found here; otherwise, the tourism industry will suffer. I ask the Minister to axe this tax in the budget.