05/10/2020

Low-cost loans, an extension of the Temporary Wage Subsidy Scheme and enhanced restart grants are among the measures expected to be included in the Government’s July stimulus package due to agreed by the Cabinet later today.

Low-cost loans, an extension of the Temporary Wage Subsidy Scheme and enhanced restart grants are among the measures expected to be included in the Government’s July stimulus package due to agreed by the Cabinet later today.
A major retraining and upskilling programme aimed at helping those who have lost their jobs due to Covid-19 is also likely to be contained in the plan, which in total is expected to be worth more than €5 billion.
Promised in the Government’s programme for government agreed last month, the aim of the July stimulus is to save jobs, create new ones and get people back to work.
The plan was considered by the Cabinet economic sub-committee earlier this week and the full Cabinet will meet this afternoon to agree the final parts of the package ahead of its launch later.
It is expected to include an extension of the Temporary Wage Subsidy Scheme beyond the current end date of 31 August and possibly until next spring, in order to give additional certainty to employer and workers.
The scheme, currently supporting the wages of more than 400,000 workers in 68,000 firms, may be renamed, though.
The eligibility criteria for the scheme, which has cost €2bn to date, is also likely to be widened to assist more firms in difficulty and account for seasonal workers.
The changes may also allow the scheme to be used for staff who were not already on the payroll prior to the pandemic in February.
The Pandemic Unemployment Payment (PUP), currently being claimed by 313,000 people, may also be extended into next year, although it is likely a pathway will be outlined towards its gradual reduction.
With the Government coming under pressure from business groups to offer additional grants rather than loans, it is expected that the restart grant will be significantly enhanced and its eligibility criteria relaxed to include non-rate paying businesses and other firms that missed out on qualifying.
It currently offers grants of between €2,000 and €10,000, and so far more than 42,000 companies have applied, with more than 31,000 grants approved.
The grant helps businesses to cover the costs associated with reopening following the easing of Covid-19 restrictions.
However, further low-cost loans beyond the already announced €2bn Credit Guarantee Scheme are also likely to feature in the plan to help firms plan for the future.
An additional waiver of commercial rates, possibly for up to a further six months, is also set to be included in the stimulus.
On the tax side, a cut in VAT similar to that announced in the UK that has been sought by hospitality and tourism businesses here is thought unlikely to be granted, but instead rebates may be offered to those in that sector.
It has been reported that a tax refund scheme that would enable customers using hotels, B&Bs, restaurants and other hospitality businesses to reclaim a portion of what they spent has been under negotiation, but sources could not confirm whether it will definitely be included.
Additional measures around loss relief for corporation tax are also thought to be under discussion.
Also on the table has been targeted investments in the life sciences sector here, which is performing strongly, as well as an export guarantee scheme.
The stimulus will also include policies to promote balanced regional development and will emphasise the importance of attracting and sustaining Foreign Direct Investment.
The rise of remote working will also be exploited and the investment in the National Broadband Plan will be used to make the most of this potential.
The July stimulus will be followed in October by a national economic plan that will accompany Budget 2021.