The 2021 Budget could have gone further in supporting companies in the freight distribution and logistics sector prepare for the future economic and operational shock of the end of the Brexit transition period, according to FTAI Ireland (FTAI), the organisation which represents the country’s logistics sector.
Aidan Flynn, General Manager of FTAI, explains: “If a trade agreement between the EU and UK is not forthcoming, it will deliver a deep, sharp shock to the movement of goods between Britain and Ireland. This scenario would create significant log jams in customs systems and delays at borders as the infrastructure, enforcement regime and the private sector will not be fully prepared. The machinations of the political process have ensured that there will be no time for business to adjust to the new trading environment effectively.
“This budget has neglected to increase spending on training support to help the haulage sector prepare for the new trading reality post-EU Exit, nor does it do anything to encourage more connectivity between Ireland and continental Europe to offset the risk to the land bridge. Within the budget, there are plans to recruit another 500 workers to aid the compliance regime necessary to deal with the post-Brexit trading environment; this does not go far enough given the immense challenges that lie ahead.
“On climate action, FTAI welcomes the €12m of funding allocated to carbon reduction measures, including support for a new vehicle purchase grant to help freight and commercial bus operators to buy electric, gas or hydrogen fuelled vehicles. As evidenced in FTAI’s Manager’s Guide to Distribution, published this month, 26 per cent of respondents are actively investigating the use of natural gas; this grant will incentivise a speedier transition to alternative cleaner fuelling technologies. However, we were disappointed that there was no mention in the budget of investment in infrastructure to further support this transition.”
Mr Flynn continues: “It is prudent that the focus of the budget was on economic recovery, given that unemployment now sits at 16 per cent of the population. Encouraging economic activity through capital investment projects must be the priority; this will help to create job opportunities and stimulate the economy. The reduction of the VAT rate to nine per cent from the November 1, 2020 will assist the hospitality and services sector, but this is very much subject to travel restrictions being reduced and a movement of the country to level two status.
“The government must support fiscal policy with a definitive strategy for international travel to help protect our global connectivity and the aviation industry. The reduced number of air passengers is creating a difficult situation for import and export activities through our airports, where over 75 per cent of air freight is moved in the underbelly of passenger flights. Aviation and the nation’s airports are critical strategic resources to ensure the global competitiveness of Ireland.”