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Retailers gloomy over economy: poll

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Finance Minister Michael Noonan has suggested VAT could rise

Finance Minister Michael Noonan has suggested VAT could rise

Finance Minister Michael Noonan has suggested VAT could rise

Retailers have called on the Government to improve consumer confidence in the forthcoming Budget.

Some 54% of shop owners rate the current performance of their own business as poor, with only 15% admitting being more confident about their business than three months ago.

However the Retail Ireland survey showed 77% of respondents believe the overall business environment is poor or very poor.

Retail Ireland chairman Frank Gleeson said: "There will be no end to the current recession until consumers feel sufficiently confident to begin spending again.

"Many consumers are simply too nervous to spend even though they have the spending power and are in comparatively well paid jobs. Government needs to embark on a comprehensive and pro-active communications strategy to put the facts on the economy in perspective for consumers."

Hikes in VAT, excise duties and carbon taxes are all likely in the massive 3.8 billion euro savings package in the forthcoming Budget.

Finance Minister Michael Noonan has also suggested that VAT could rise to 23% from 21%.

He called for a new social welfare smart card system so payments and benefits spending are promoted in the domestic economy, stamp duty and property tax incentives for first-time buyers and incentives for home improvements through a home improvements tax credit.

Mr Gleeson, Topaz director, said the good work done by Government communicating to the international financial markets and the EU/IMF/ECB must be replicated at home. "Any increases in VAT or excise will further delay any recovery in consumer spending and should not form part of next month's Budget," he added.

"Next year consideration should be given to moving the Budget to earlier in the year and away from the vital pre-Christmas trading period."

PA