Jack Quann
Jack Quann

15.49 13 Oct 2020


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There has been broad welcome of measures put in place to help businesses as part of Budget 2021.

As part of plans announced earlier, there is to be a new scheme to provide support for firms affected by coronavirus shut-downs.

The COVID Restrictions Support Scheme (CRSS) is designed to help those who have been significantly impacted, or temporarily closed, as a result of the restrictions.

The scheme will generally operate when level three or higher is in place, and will stop when restrictions are
lifted.

The sectors impacted by the current level three restrictions are accommodation, food and the arts, recreation and entertainment.

But if the Government decides to move to a higher level of restriction, other sectors may qualify.

A payment of up to €5,000 per week will be made, based on a businesses 2019 average weekly turnover.

They can apply to the Revenue Commissioners for a cash payment in respect of an advance credit for trading expenses for the period of restrictions.

The scheme is in effect from today until March 31st 2021.

The Employment Wage Subsidy Scheme (EWSS) will also continue during 2021.

Business group Dublin Chamber has welcomed the measures.

Its head of public affairs, Fergus Sharpe, said: "It is vital that businesses in tourism, hospitality, and the other worst-hit sectors, have a roadmap for business survival over the coming months.

"The grant scheme announced this afternoon has the potential to be a valuable lifeline for the most badly impacted businesses as we head into a very difficult winter.

"The decision to waive commercial rates for the remainder of 2020 is a significant help and the decision to drop the VAT rate for hospitality and tourism will also be welcomed."

“The extension of the Employment Wage Subsidy Scheme into 2021 will come as a particular relief to many businesses still reeling from a collapse in revenue."

However, the group cautioned that the Government will need to do more to boost investment in indigenous SMEs.

Mr Sharpe added: "Helping Ireland's indigenous business base to recover and grow will require a boost in investment in SMEs.

"The ESRI identified a significant investment gap in the Irish SME sector in a joint study with the Government several years ago, estimating that the gap amounts to over €1bn annually.

"The situation has deteriorated drastically due to COVID-19, with estimates of the revenue shortfall facing SMEs at the end of 2020 ranging from €10.3 billion to €15bn.

"However, Ireland’s current tax regime undermines efforts to promote investment in startup SMEs as opposed to larger blue-chip firms."

"The business community was hoping for a serious plan to stimulate investment in Ireland’s SME base, and this afternoon it is still seeking assurance.

"The new equity investment fund promised by the Government is welcome but there is no timeline for delivery."

'Ambitious but appropriate'

Ibec, the group that represents Irish business, has also welcomed the scale of the package and supports announced to help business deal with both COVID-19 and Brexit.

Its CEO Danny McCoy said: "The scale of Budget 2021, the largest in the history of the State, is ambitious but appropriate given the magnitude of challenges facing the Irish economy.

"Ibec has been calling for Government to learn from the mistakes of the past and to not decrease our capital expenditure commitments.

"Today's announcement of a planned increase in capital spending is a positive move given the scale of the deficit in both social and physical infrastructure.

"This investment will be central to our collective efforts in enabling the economy to resurge more competitively and sustainably.

"It is also positive to see the commitment to fund all island infrastructure projects through the Government's new Shared Island unit.

"As businesses continue to engage in contingency planning for a 'hard Brexit', Government has made welcome pledges today towards the Recovery Fund and additional measures.

"It is imperative that we see now these financial supports put to work in the areas of the economy most exposed to the economic fallout of Brexit."

He also said a reduction in VAT, along with extension of the EWSS, is "an important first step" in getting the experience economy back on its own feet.

"The costs of high levels of unemployment, both in social terms and to the exchequer, is unsustainable and can leave damaging scars on our labour market and society.

"It is welcome to see policymakers building on the lessons of the last crisis and deliver commitments of increased supports and new labour market activation programmes to support jobseekers."

'Step in the right direction'

The Restaurants Association of Ireland (RAI) has described the budget as a vital step in supporting a struggling and flattened hospitality sector.

However, CEO Adrian Cummins has warned that the hospitality VAT reduction is only a competitive driver if businesses are open and able to trade.

"This budget is a life-line for the restaurant and hospitality industry. We welcome the reduction of the VAT rate from 13.5% to 9%.

"We also are pleased to see the COVID Restriction Support Scheme (CRSS) announced offering cash payments of up to €5,000 a week for firms forced to close due to COVID-19 restrictions.

"While these new measures announced today won’t fix everything, there is now hope for many restaurant businesses who are struggling.

"The Restaurants Association of Ireland also welcomes the extension of the EWSS scheme until the end of 2021 but it is disappointing that the EWSS and PUP wage supports were not restored to their previous rates, especially for the restaurant and hospitality sector which is essentially locked down again.

"We welcome the extension of the Commercial Rates waiver until the end of 2021."

'Short-term fixes'

The trade union Unite, which represents workers in all sectors, said the budget 'fails to lay the groundwork' for a move to a sustainable wage-led recovery.

The union's senior officer Brendan Ogle said that the Government missed an 'unprecedented opportunity' to re-think the economy in the interests of society.

He said: "Supports for businesses have not been matched by supports for workers: instead, those who lost their jobs due to the pandemic, and may have been thrown out of work for a second time by the level three measures, have had their Pandemic Unemployment Payment cut with no indication of restoration offered by this budget.

"The disparity between supports for business and supports for workers is particularly striking in the hospitality sector, where low pay and precarious working were the norm pre-COVID.

"It seems employers in this sector are to be allowed treat many workers like slaves while continuing to boycott the hospitality Joint Labour Committee, paying minimum wages, offering precarious contracts, stealing their tips, and now pocketing a significant VAT cut.

"The hospitality VAT cut itself is simply a reheated recipe from the last crisis - a pre-pandemic employer demand now met by the Government in its pandemic budget.

"By contrast, the Government missed an opportunity to announce a meaningful increase to the National Minimum Wage following the derisory 10 cent proposal recommended by the Low Pay Commission – a proposal which was rightly rejected by the trade union movement."

He added: "Our post-pandemic recovery cannot be built on low pay combined with poor workers' rights.

"A sustainable wage-led recovery means putting money into workers’ pockets, not only by raising wage floors and maintaining income supports, but also by enabling workers to negotiate collectively to improve their terms and conditions."

"Today's budget misses that historic opportunity, focusing on short-term fixes and rehashing the failed approaches of the past.

"It benefits the same interests as before, and again leaves behind those who were left behind before".

Main image: People seated in outside dining areas in Dublin city centre, as Budget 2021 reveals a VAT cut for the hospitality sector. Picture by: Sasko Lazarov / RollingNews.ie

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