Noonan announces aviation incentives

Significant job creation could come from the aviation sector, Minister for Finance Mr Noonan said in his Budget speech.

Announcing new incentives for aviation-related activities in and around the State’s airports, Mr Noonan said they would mirror reliefs proposed for the new International Services Centre in Shannon.

The Minister said to facilitate the sector, he would be “putting in place measures to facilitate the construction of hangers and ancillary facilities” which would be key to attracting additional aviation sector organisations to the country.

In addition to services for aircraft themselves the Government is keen to examine the feasibility of developing services such as new funding sources for airlines and aircraft financing and leasing.

Mr Noonan said a further explanation of the Government’s intent should become available shortly. Industry sources said the intention appeared to be an attempt to mirror the success of Shannon Development which was previously the Shannon Free Airport Development Company, which incentivised logistics systems around Shannon Airport.

A spokesman for Mr Varadkar said the incentives would apply to to hangars “and other assets”, but added further detail was not immediately available.

A second major incentive for the transport industry was the decision by Government to rebate diesel used by hauliers with effect from the 1st of July 2013. The rebate is something about which hauliers lobbied hard for much of the past year, pointing out that diesel price increases have put some of their members out of business.

Mr Noonan said virtually all businesses in Ireland rely on cost effective transport provided by hauliers, the majority of whom are small businesses. He said in order to assist the competitiveness “of this key industry”, he was introducing a “strictly policed” rebate to tax compliant hauliers.

However immediate surprise and dismay was expressed by the Coach Tourism & Transport Council which represents Ireland’s independent bus and coach companies. In a statement the council said the move ignored those in the passenger transport sectors.

The council said hauliers already enjoyed cheaper diesel than coach companies because they received a full Vat rebate, “whereas the coach companies do not”. Chief Executive Gerry Mullins said “now the hauliers will enjoy an additional discount on their fuel, while the coach and bus companies won’t. Bus and coach companies will now pay approximately 40 percent more for their fuel than haulage companies”.