Heralded as the largest ever injection of cash into the Irish economy, the July stimulus package was unveiled yesterday. The €5billion cash stimulus along with €2 billion in loan guarantees for business is an ambitious attempt to kick start the economy with the key message being we need to spend our way out of this.
There was a very broad range of measures announced, designed to encourage spending by consumers and businesses in the hope that, these, together with Government expenditure on infrastructure, will jump start the economy, and that significant momentum will have been gained over the 6 month duration of most of the measures.
Overall, RBK welcomes the above measures as an essential package that had to be delivered by Government. In terms of the individual measures, we would rate them very differently.
Among the highlights are the extension of the Employment Wage Support Scheme to April 2021 – a vital support to business over the past 4 months, the increase in the Restart Grant – delivering cash directly to businesses in a quick practical manner and the redesign of the Credit Guarantee Scheme which should help unlock new loans in a quicker fashion. In addition the €500m of accelerated capital works should ensure local businesses are engaged to carry out works in their region.
We feel a number of measures have missed their mark by not being targeted and the likely level of administration required. These would specifically include the reduction in the 23% VAT rate to 21% for 6 months and the Stay & Spend scheme neither of which does anything of real note for the tourism and hospitality sector which needs a sector-specific package of supports. The additional funding via the Future Growth Loan Scheme and grant element of the Sustaining Enterprise Fund are welcome but they need to be deployed quickly.
We look forward to a rapid deployment of yesterday’s announced measures with additional supports and more certainty for businesses beyond the above temporary measures in Budget 2021.
Key Tax Measures
We have summarised the key measures introduced which are designed to encourage spending by consumers and businesses in the hope that, these, together with Government expenditure on infrastructure, will jump start the economy, and that significant momentum will have been gained over the 6 month duration of most of the measures. Read more...
Funding Supports in the July Stimulus
The July Jobs Stimulus program promises a €5 billion cash stimulus along with €2 billion in loan guarantees for business is an ambitious attempt to support and kick start the economy. Included within the program are a number of valuable grant and funding supports that businesses should progress to bolster their cashflow as the economy continues to adjust to the new trading normality. Read more...