Budget 'could sound death knell for one in five shops'
Date Published: 10-Dec-2009
THE Budget cuts in public service pay, allied to the reduction in social welfare payments, could result in one fifth of retail businesses closing down across Galway city and county, it was warned yesterday.
Business and union leaders estimate that the combined pay and social welfare cuts alone will amount to around €35million hit for County Galway – meaning that spending power will be dramatically reduced.
It is estimated that there are around 15,000 working in the public service sector in Galway city and county and the wage cuts announced yesterday afternoon will have a significant impact on the local economy.
The retail sector in Galway is bracing itself for a bleak 2010 with many contemplating New Year closures due to a serious downturn in trade.
Pay cuts to the tune of five percent were announced for those earning up to €30,000, with a seven and a half percent cut for those between €30,000 and €70,000, which represents the vast majority of those working in the public sector in Galway.
And because of this, yesterday’s Budget signalled further misery for the retail trade with the amount of disposable income reduced even further.
Unions representing the workers in the public sector have estimated that the impact across Galway alone amounts to a whopping €35million during 2010.
This is the equivalent of a factory closing with the loss of around 1,000 jobs – and it is expected that businesses in the city will be worst affected.
SIPTU’s Colm Keaveney said that there were currently over 22,000 people out of work across the city and county, the cuts to the public service were more severe than those in the private sector.
“Some of the wage cuts applied in the private sector were unnecessary, with employers using the economy to justify cuts rather than dipping into the huge profits they made in the boom period.
“A pay cut to the public service will simply shut down businesses across County Galway. Not even a reduction in the price of a pint will save some pubs,” Mr. Keaveney added.
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