THE 2010 BUDGET

The tourism elements of budget 2010 were more favourable than many in the sector anticipated. The Minister even highlighted the increasing importance of tourism to our economy in his budget speech and I'm not sure this has ever happened before. He acknowledged that tourism is 'a critical, labour intensive indigenous sector'. The main highlights are as follows:

• The tourism services budget is set to increase by 2% to over €155 million while the marketing budget remains at 2009 levels ( €44.25 million)
• The capital investment in tourism product development will be increased threefold to €22 million, meaning that projects such as the CCIC Kenmare will hopefully get the go ahead
• The Kennedy Homestead in Dunganstown, Co Wexford, will be developed into a major tourist attraction
• Discounted rail travel will be offered to senior citizens visiting Ireland in a scheme to be finalised between Iarnród Eireann and Fáilte Ireland.
• Excise duties are to be reduced on wine (60 cent per bottle) and pints of beer (12 cent)
• Vat on retail goods is to fall by 0.5% to 21%.

Given that Tourism Ireland is committed to a major push in the UK market next year, I was surprised to see the €10 Air Travel Tax remain. Policymakers will be aware that the Air Passenger Duty (APD) charge in the UK rose to £11 on November 1st. According to to the Board of Airline Representatives, this APD charge is likely to become a tarriff barrier for UK residents going on holiday.

Meanwhile, the National Competitiveness Council stated recently that 'it is important to recognise that consumption taxes directly affect tourism exports in a way that is unique to this sector' and that 'these taxes contribute to the cost of tourism products'.

So, I would also liked to have seen Vat rates on food and accommodation reduced as happened in other EU countries this year. This would then enable Tourism Ireland to really make a compelling proposition in the UK and in other overseas markets.