Thursday, 15 October 2020
Department of Trade, Enterprise and Employment
I have engaged with the Minister of Finance and Minister of Public Expenditure and Reform regarding the 2021 budgetary priorities.
My focus in particular on building on the measures in the July Stimulus Package. I want to help small businesses in particular to navigate the months ahead, which will be challenging, and help get as many people as possible back to work. The July Stimulus includes enhanced direct grants to businesses and improved access to low cost loans, worth more than €5 billion, with an additional €2 billion in loan guarantees. It is bigger in scale than most budgets and will be deployed at speed. It is designed to help businesses to open, to help those that are already open to stay open, to get staff back to work and for those who cannot go back to their old jobs, there are new opportunities.
We’ve already pumped billions of euro into the economy, through wage subsidies, the PUP, cash for businesses, low cost loans and commercial rates waivers. We know these actions have made a difference. Helping to repair the damage wrought on the economy – and keeping the virus contained – is vital for the wellbeing of our people. As set out in the July Stimulus we will do this by:
- supporting viable businesses and jobs, including new hires, through the extended wage subsidy scheme, which run until the end of March 2021, will be open to firms that do not currently participate and open to workers like seasonal workers who weren’t previously included;
- giving companies extra assistance to reopen and stay open through an enhanced Restart grant available to more firms and more generous;
- providing more and cheaper loan finance;
- funding to help businesses and get ready for Brexit;
- exploiting opportunities in areas like Life Sciences and investing in decarbonisation and digitalisation;
- the six month reduction in the VAT, going down from 23% to 21%;
- more funding for the IDA to promote Ireland as a place for foreign direct investment.
It is likely that COVID-19 and Brexit will continue to affect the Irish economy over the next 12 to 18 months and we will need to continue to be aware of the challenges that these pose for enterprise.
Whilst these will be the most immediate concerns to our enterprises, we must continue to respond in a way that also addresses the medium and long-term needs of enterprise.
As part of Budget 2021, the Exchequer allocation for my Department will increase by €254m. I am allocating an additional €136m to address ongoing COVID-19 challenges, including €50 million to Enterprise Ireland. I am allocating €30 million in further funding will go to the IDA and EI for an EU approved COVID Life Sciences Products Schemes, €25 million to IDA and €5 million to EI. We will maximise the potential of the exemption from EU state aids afforded through this scheme. This will deliver very significant economic and employment benefits. I am also providing €5 million in funding for the Online Retail Scheme to allow retailers to enhance their online presence.
I am providing €10 million to continue the non-repayable grant of up to 50% of a funding package available under the Sustaining Enterprise Fund through Enterprise Ireland.
In relation to accessing finance, I am providing over €14 million to fund my Department’s contribution to increase the lending capacity under the Future Growth Loan Scheme.
I am providing for the further capitalisation of Microfinance Ireland by €5 million to allow it to continue to provide its tailored COVID Loan Scheme to micro enterprises impacted by the pandemic.
I am providing a further €25 million to meet liabilities in the first full year of the new COVID Credit Guarantee Scheme.
As part of Budget 2021, we announced also the new COVID Restrictions Support Scheme (CRSS) to provide targeted support for businesses.
The scheme is designed to assist those businesses whose trade has been significantly impacted or temporarily closed as a result of the restrictions as set out in the Government’s ‘Living with COVID-19’ Plan. The scheme will generally operate when Level 3 or higher is in place and will cease when restrictions are lifted.
The sectors impacted by the current Level 3 nationwide restrictions are accommodation, food and the arts, recreation and entertainment. If the Government decides to move to a higher level of restriction then other sectors may qualify.
For these businesses, the Government will make a payment, based on their 2019 average weekly turnover, to provide support at a difficult time.
The scheme will apply to business premises where the Government restrictions directly prohibit or restrict access by customers. Qualifying businesses can apply to the Revenue Commissioners for a cash payment in respect of an advance credit for trading expenses for the period of the restrictions.
The scheme will be effective from 13th October until 31st March 2021, and the first payments will be made to affected businesses by mid-November.
Payments will be calculated on the basis of 10 per cent of the first €1 million in turnover and 5 per cent thereafter, based on average VAT exclusive turnover for 2019. It will be subject to a maximum weekly payment of €5,000.
I want the impact of this pandemic to be a lost year and not a lost decade. So, we will continue to focus on what we can do to grow businesses and grow opportunities for Irish business. To grow resilience and productivity in businesses.
Our focus in allocating our funding is to ensure that businesses who need help with challenges arising from Brexit and COVID-19 get it and get it when they need it.
We are focusing on providing the right funding and support to help grow resilient and future-focused businesses beyond COVID, beyond Brexit towards the economy of the future.