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'Staycation voucher', wage subsidy extension and cheap loans all part of much-vaunted July stimulus

It is being touted as the much-heralded ‘rescue’ plan the government hopes will boost the economy.

Taoiseach Micheál Martin.
Taoiseach Micheál Martin.
Image: PA Images

THE GOVERNMENT WILL seek to put a bumpy start behind them with agreement today on the much-vaunted July stimulus package.

The plan is expected to include low-cost loans for businesses, an extension of the Temporary Wage Subsidy Scheme and a grant scheme for businesses of between €2,000-€10,000.

To boost the tourism sector, a so-called ‘staycation voucher’ for holidaymakers in Ireland to claim a rebate on part of their hospitality costs is also expected. This rebate is not expected to come into force until the autumn, however, and will run until April 2021. 

On the social protection side, it is understood that a proposal to reduce the Pandemic Unemployment Payment by €50 to €300 per week is under consideration.

Meanwhile, there could be relief for businesses as the Wage Subsidy Scheme is also expected to be extended beyond August, perhaps to the end of the year, and could be open for companies to use in relation to new hires.

The July Stimulus package, which was originally due to sign off on Tuesday, is expected to be agreed by Cabinet today. It is being touted as the much-heralded ‘rescue’ plan the government hopes will boost the economy.

While the plan hopes to inject much-needed funds into Irish businesses, clarity will also be given to thousands of workers on the wage subsidy scheme as well as the pandemic unemployment payment.

Tánaiste and Business Minister Leo Varadkar has said it will be a “package of scale”. So, how much will it cost?

“Several billions of euro… a multi-billion euro package,” said Varadkar.

While there are a lot of measures in the mix, much of the plan has already been well-flagged. However, one interesting aspect hints at the Green Party’s fingerprints on the plans.

Something Eamon Ryan and Varadkar are understood to be interested in rolling out is a “Green fund” which will help businesses invest in new heating systems and insulation. It is hoped such a measure will benefit businesses, tick the climate action box, while also creating jobs.

The stimulus will also include an enhanced restart grant for businesses, which currently offers a minimum payment of €2,000 and a maximum payment of €10,000.

The extension of commercial rates waivers for the rest of the year will also be considered, as will the reduction in some business taxes. Access to cheaper loans is also on the cards for businesses, something that many TDs have called for. Criticism has been levelled at the government’s loan schemes due to the interest rates ranging from between 4.5%-5.5%.

Varadkar told the Dáil that the government is looking to what other countries are doing also, though he ruled out restaurant vouchers for all citizens in a bid to boost tourism, something done by other countries.

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“We compare favourably when it comes to the Pandemic Unemployment Payment (PUP). Not many countries are providing €350 per week to workers. That is triple what it is in Northern Ireland or Britain. We compare well when it comes to the wage subsidy scheme, which will end in the UK, for example, in October.

“We have not yet set a date for ours. We probably need to do more with direct grants and in terms of our loan guarantee. These are the kinds of things we are working on for next week and beyond,” he said.

The government plans to address five areas:

  • income supports for workers
  • direct grants for business
  • cheaper finance
  • new opportunities for future jobs
  • support for the hardest-hit sectors.

Alternative and new jobs in areas such as housing construction, the care sector or green energy, as well as apprenticeships, higher education options, back-to-work enterprises, back-to-education options, are also expected to feature.

Minister for Education and Skills Norma Foley and the Minister with responsibility for Higher Education Simon Harris will roll out options for young people who have been on the pandemic unemployment payment or jobseeker’s payments for a prolonged period.

Social Protection Minister Heather Humphreys is examining the community employment scheme which will also be scaled up.

The July stimulus is very much focused on the needs of young people in particular. It will have a particular focus on sectors which employ large numbers of younger people, such as hospitality, retail, tourism and leisure, and construction. 

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