In the wake of a 3.3 per cent increase in commercial rates by Dublin City Council, Galway Chamber is calling on Galway City Council not to increase rates in the upcoming council budget, urging councillors to put jobs first.

There were 1,812 redundancies in County Galway in the first ten months of this year, with an increase of 52.3 per cent increase in unemployment in the period from October 2007 to October 2008. In October 2007, 5,214 people signed on the live register in Galway City, and by October 2008 that figure had risen to 7,943.

Chamber President Paul Shelly urged the city council to protect jobs in Galway, "by examining closely every euro of cost it spends and where possible implement initiatives that will reduce the burden of charges on business at this time."

However, Councillor Declan McDonnell, who is closely involved with the Galway City Business Association, believes an increase is unavoidable.

"These are difficult times, but I am a realist, and the council can't balance its budget without an increase," he told the Galway Independent.

However, he said he would work with the other councillors to ensure that the increase was kept low, because "businesses are suffering all over the country and particularly in Galway".

"There will be an increase but I will aim to keep it below three per cent if I can," he added.

At a meeting of the City Council's Corporate Policy Group, it was revealed that many ratepayers have yet to fully pay their rates bills for 2007, which the chamber believes is an indicator of cash flow and profit problems.

Central funding to local authorities was reduced by seven per cent in the Budget, and businesses will also feel the blow from a VAT increase, which brings the rate to 21.5 per cent.

"It is time Galway City Council recognised the difficult business conditions that face Galway businesses," said to Chamber Chief Executive, Michael Coyle.

"Consumer confidence is low leading to severe cash flow problems, suppliers are seeking earlier settlement on invoices as they too experience cash flow difficulties, while the banks are reacting to deteriorating business trends by restricting flexibility on overdraft limits. Add to this the additional charges and levies introduced by Government in the recent budget and high rental levels in the retail sector and you have a recipe for business closures and job losses," he said.

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