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The coronavirus pandemic has been the biggest challenge the country has faced since gaining independence, Finance Minister Paschal Donohoe said in presenting the 2021 budget.
“We have never experienced a challenge like this, but likewise Ireland has never given such a strong response,” said Mr. Donohoe, as he delivered his budget speech to a Dáil seated in the Convention Center shortly after 1pm.
He described the nearly € 18 billion (€ 17.75 billion) budget package as “unprecedented in size and scale in the history of the Irish state.”
The budget was prepared based on the assumption of “the continued presence of the virus in our country next year and the absence of a widely available vaccine,” he said.
Along with Covid-19 and the threat of a no-deal Brexit, the government also had to make progress on issues such as housing, improving health care and climate change, he said.
“From the ashes of the pandemic, together we will build a stronger and more resilient Ireland,” he said.
The cabinet approved the budget in a meeting Tuesday morning, with little disagreement among the three coalition partners.
Finance Department officials had predicted that total job losses from the pandemic would reach 320,000 in 2020, and young people were particularly affected, he said.
Donohoe said the budget was “exclusively focused on the rest of this year and next.”
The budget will include cash aid for companies that were forced to close during the pandemic, an additional € 4 billion for the Health Department, an additional € 500 million for social housing, as well as financing to hire more doctors, gardaí, teachers and special needs assistants.
It will include a massive package of state aid for individuals and companies, as well as more funds for public services, with a general debt of up to 19,000 million euros.
Education Minister Norma Foley aims to reduce the student-teacher ratio to 25: 1 with the creation of 600 new positions.
Housing Minister Darragh O’Brien’s housing affordability program will cost 468 million euros and will include 110 million euros to be divided between affordable purchase measures and the scheduled delivery of the rental cost in 2021.
The affordable purchase measures will be constituted as a shared capital scheme and will amount to 75 million euros. Details on this are still being worked out and will be announced in the coming weeks.
Budget 2021
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However, it is understood that the department is in talks with the banks of the pillar to provide counterpart funds, bringing the total to 150 million euros. This will also need state aid approval. Some 35 million euros are reserved for rental expenses. The remaining € 358 million is split between existing schemes such as the serviced sites fund, the local infrastructure housing activation fund, the Irish rebuilding mortgage loans and the Territorial Development Agency.
One of the latest measures finalized late Monday night was to allow the vast majority of people receiving pandemic unemployment pay to get the Christmas welfare bonus this year.
The Minister of Public Expenditure, Michael McGrath, will follow his colleague with a speech at around 1:45 pm.
After the government speeches, Sinn Féin finance spokesman Pearse Doherty will give his party’s response to the budget, the first as the largest opposition party.
Speaking before the Cabinet meeting, Mr. Donohoe said the Government was “very aware of the concerns, the anxiety that many have regarding the future, we understand the air of uncertainty that we have now at this time.”
“What we are doing in this budget is outlining how we are going to support our health service, we are going to aim to support employers and we are also going to address the concerns that those who have lost a job in circumstances they did not believe possible, that we as a country did not believe possible, “he said.
On his way to Cabinet, McGrath described Budget 2021 as a budget of “hope and confidence.”
“I hope we can get through this very difficult period. Confidence in the fact that we are providing a record level of public spending, investment and support, we hope it will help to maintain the high level of social solidarity in this period ”, he said.
On Tuesday, Health Minister Stephen Donnelly said the “largest health budget in history” would create a “permanent capacity” throughout the system.
“It is a great investment in acute care, in beds and doctors, in nurses, in allied health professionals; it’s a very big investment in community care, ”he said.
‘It’s time to stimulate’
Green Party leader and Environment Minister Eamon Ryan said the large spending increases were “the right thing to do” given the current circumstances.
“We have to make the country go through a very difficult period and I believe that the economic strategy is the correct one, this is not the time to cut back, it is time to stimulate the economy,” he said.
The budget is expected to include a new scheme to support the cash flow of companies that were forced to close due to Covid-19 restrictions, or whose turnover has been reduced by 80 percent.
Payments will be capped at 5,000 euros per week, and ministers said this morning that the plan will be open to applications starting next week. The first tranche of payments will be made next month.
It is understood that you will mainly focus on small and medium-sized businesses.
The grant is understood to be € 1,000 higher than your current scheme in Northern Ireland and the UK. It will be paid in addition to the Subsidy Plan to the employment salary.
Other budgetary measures include an additional € 5.5 million for the hot school meals program and an additional € 2,000 for surviving widowers and civil partners grant applicants.
There will also be a new fund of € 50 million to provide one-time financial aid to full-time third level students, probably worth € 250 for each.
There will also be a € 120 million package for recycling and recycling, including an extension of the learning program. Higher Education Minister Simon Harris has also secured € 30 million for research, including island-wide research.
There will be a large package of climate action measures, including a home renovation plan.
The vehicle registration tax and the motor tax will be reformed to incentivize low-emission and electric cars and penalize polluters, and about 10 percent of motorists will face higher bills.
The total cost of the social welfare Christmas bonus this year is expected to be around 350 million euros, well above the 279 million euros paid last year.
As an exceptional and unique measure, those who receive job search payments will also receive the bonus this year if they have been on the scheme for four months instead of the usual 15 months.
In health, there will be an increase in spending of 4 billion euros. It was also agreed on Monday that about 50 million euros would be set aside to finance new drugs for thousands of patients.
Gardaí Financing
Furthermore, Justice Minister Helen McEntee has secured funding for an additional 600 Gardaí and 500 other civilian employees, and funds to replace 70 temporary Garda vehicles that have been used during the pandemic.
In housing, some 500 million euros will be allocated in new financing, a large part of this destined to the construction of social housing by local authorities and approved housing bodies on public land.
In education, it is expected that there will be more funding to reduce the pupil-teacher ratio in small schools and more allocation to disadvantaged schools under the Deis program.
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