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From gas station hikes, Christmas bonuses and cash for companies affected by Covid to swimming pools and video games: 10 things you need to know about Budget 2021.
1. Carbon taxes affect motorists now, but home heating is saved until next summer
The expected € 7.50 increase in carbon tax has been delivered but will not affect home heating costs until after May 1, 2021. That means there will be no increases in coal, gas and home heating oil until after winter, which will be quite bleak given the ongoing pandemic. However, the changes will cause the cost of gasoline and diesel to rise from midnight tonight.
The carbon tax increase is expected to bring in 108 million euros next year. The increases projected for the next decade are part of Ireland’s contribution to the fight against climate change. The Minister of Public Expenditure, Michael McGrath, promised that the funds raised will help protect vulnerable people, as well as finance the retrofitting of homes for energy efficiency. The fuel allowance for vulnerable households will be increased by € 3.50 per week to € 28 to compensate those with lower incomes for the additional costs they are likely to face from the carbon tax increase.
2. Full Christmas bonus this year
More than 1.4 million people who receive social benefits, including the state pension and the Pandemic Unemployment Payment (PUP), will be paid for an additional full week, the Christmas Bonus, the first weekend in December. Generally, the bonus is only paid to people on long-term welfare and job seekers who are paid for more than 15 months. Mr. McGrath said that given the “unprecedented circumstances” this year, for this year alone, the 15-month requirement will be reduced to four months. He said the vast majority of people who are currently in the PUP will receive a Christmas bonus if they go out of work in early December.
3. Up to € 5,000 per week for companies affected by Covid-19
The new Covid Restrictions Support Scheme (CRSS) will be offered to businesses affected by pandemic restrictions with payments of up to € 5,000 per week available. The scheme will operate while Level 3 or higher restrictions of the Government’s Living with Covid-19 plan are in effect. The sectors that currently qualify are lodging, food and the arts, recreation and entertainment. Finance Minister Paschal Donohoe said that if higher levels of restrictions are introduced, other sectors may qualify. Payments will be based on the average weekly turnover of a company in 2019. They will have to show that their turnover has been seriously affected. The maximum weekly payment will be € 5,000.
4. Taoiseach’s Shared Island initiative for € 500 million
Taoiseach Micheál Martin’s Shared Island initiative, to boost cooperation with the Northern Ireland Executive, is to obtain equity financing of € 500 million over five years. Mr. McGrath did not explain in detail how this money will be spent. Instead, he said it will be to “foster new investment and development opportunities on a North / South basis and support the implementation of key cross-border projects as set out in the Government Program.”
Possible projects listed include the A5 Derry road project, the Ulster Canal connection from Clones to Upper Lough Erne and Sligo to Enniskillen Greenway.
5. Financing swimming pools and attracting sporting events
A € 45 million package was announced for sports, although no specific funding was announced for organizations under pressure such as the GAA, the Irish Football Association or the Irish Rugby Union.
Those organizations are sharing 40 million euros announced earlier this year. Sport Ireland, which allocates state funds to sports bodies, including major field sports, receives an additional € 36 million for next year. The additional € 7 million funding will go to “large-scale sports infrastructure” with swimming pools identified as an area for spending. Initiatives to attract major sporting events to Ireland will be funded to the tune of € 2 million.
6. Job losses will amount to 320,000 this year
Donohoe said 320,000 jobs are expected to be lost this year due to the Covid-19 pandemic with a disproportionate impact on young people. Its officials hope to recover 155,000 jobs next year. If tighter lockout restrictions are introduced, job losses could be worse. McGrath said the Department of Social Protection will be funded to support the earnings of at least 370,000 job seekers in 2021 along with 350,000 people in the Employment Wage Subsidy Scheme (EWSS).
7. Wage subsidies will continue until the end of 2021
Donohoe said the current EWSS will continue until March 31, 2021. However, he said “a similar type scheme will be needed until the end of 2021 to provide companies with higher levels of certainty in the most uncertain times.” He promised: “There will not be an abyss for this vital plan.”
Donohoe said the government will decide the form of its extension when economic conditions are clearer. It expects Ireland to be able to access € 2.5 billion in EU funding to cover the cost of the previous Temporary Wage Subsidy Scheme (TWSS).
8. More health workers, Gardaí and teachers
According to Mr. McGrath, “an unprecedented additional 4 billion euros” for health services will go towards the recruitment of up to 16,000 additional positions. There will be 1,146 additional hospital beds and an increase in intensive care beds from 255 pre-Covid to 321 by the end of 2021.
Up to 620 new Gardaí will be recruited in addition to a planned force of 14,500 by the end of 2020; 500 civilians will be recruited to free Gardaí for front-line duties. € 7.5 million will be spent on vehicles for the Garda fleet.
Over 300 elementary school teachers will be hired to reduce the student-teacher ratio to 25: 1. Nearly 1,000 new special needs aides will be hired.
9. Effective for roads, public transport and schools
McGrath said that 10 billion euros will be spent on “critical projects in all regions of our country.” It includes road projects such as the N56 in Donegal, the N4 in Sligo, the N5 in May and the N22 and Dunkettle Interchange in Cork. 41 intercity rail cars will be purchased and there are plans to sign contracts for up to 600 electric cars as part of the DART + project in Dublin, as McGrath put it “to ensure our economic recovery is green.” He said money will be spent to advance long-promised BusConnects and Metrolink projects.
10. Boost to the film and video game sectors
The film industry has been “badly affected” by the pandemic-related shutdowns, according to Donohoe. As a result, he announced that the Section 481 tax incentive aimed at boosting filming in the regions will be extended for another year until the end of 2023.
He also announced that work will begin on the development of a tax credit for the digital games sector. The goal is for it to be operational as of January 2022. He said that the sector has experienced “exponential growth” in the last decade and that there are potential synergies with established film and animation sectors to support job creation in the videogames.
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