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BUDGET 2021 HAS been revealed.

 

 

Here’s how the day played out… 

Welcome to this year’s TheJournal.ie Budget liveblog! I’m Aoife Barry and I’ll be with you this morning keeping you up to date with all the Budget 2021 happenings.

Before the big stuff kicks off, it’s time to get you up to date on what you need to keep an eye out for. 

For starters, here’s a look at how the announcement itself will go.

One big change is that things won’t be happening in Leinster House – instead, the announcement will take place at the Dublin Convention centre. That’s so that they can have the full complement of TDs and ministers, with social distancing.

There’s that small matter of the global Covid-19 pandemic, see…

Things will kick off properly at 1pm, when Finance Minister Paschal Donohoe reads his Budget speech.

He’ll be followed by Public Expenditure Minister Michael McGrath. Both speeches will last about 45 minutes. 

After the Budget speeches are given this afternoon, the main opposition party (that’s Sinn Féin) will get an hour to reply with its own comments.

Then the six other opposition parties will get 45 minutes each.

The speeches should be done by 8pm

Then they’ll have to vote on the Budget measures, at 8.30pm – and voting is due to end at midnight.

A note on that – we’ll get immediate changes voted in tonight, but votes on some of the more substantial issues will take place in subsequent days.

Minister Donohoe was on his way in that photo below to a Cabinet meeting, where they’re going to be signing off on the details in his Budget speech. Then he’ll make his way to the Convention Centre for the speech at 1pm. 

Yesterday, the leaders of the three coalition parties met to put the final touches to the Budget – you can find out more about that here.

Typically on Budget Day, lobby groups and reporters would be spending a lot of time at Buswell’s Hotel near Leinster House.

It’s where you go to get feedback from these groups about the Budget announcements, and to get a sense of how the announcement has gone.

But this year, with the Covid-19 pandemic ongoing, things are different. 

“Usually you’d have, I don’t want to say people swinging out of the chandeliers, but you’d certainly have a lot of journalists here in big numbers catching up with industry people,” general manager Paul Gallagher said

It won’t drive any extra business to be honest. We have 20 rooms booked and they’re mainly Senators and TDs staying overnight. We’ll have RTÉ broadcasting a certain amount of coverage from here, because they’re classed as essential workers, so luckily we’ll have them. So that means we’ll at least have something going on.

Some lobby groups will be hosting online events instead of in-person events. 

Christina also says we can expect these announcements today:

  • A Christmas bonus for anyone on social welfare for more than four months (including the PUP)
  • Targeted supports for businesses/sectors impacted by lockdown
  • Tens of millions of euro to get live gigs up and running again
  • 50c on a pack of cigarettes – but the price of alcohol is not likely to increase 

What about if you’re in the tourism or hospitality areas?

Christina says we can expect VAT to be cut to 9%.

On housing, we can expect €500m for social and affordable housing build.

Those living alone can expect a €5 increase to the Living Alone Allowance.

Moving to the environment – there will be a carbon tax increase on diesel, petrol and fuel. And on the topic of vehicles, there’ll also be increased motor tax and VRT for emissions.

We know that one thing we can expect, as our political correspondent Christina Finn confirmed, is that people who have been on the PUP for four months will get a Christmas bonus.

That’s the social welfare bonus given out over the festive season.

RTÉ notes that the one-off decision came after “lengthy talks” between  Minister for Public Expenditure Michael McGrath and Minister for Social Protection Heather Humphreys.

If you’re wondering about the impact of the coronavirus pandemic on the State’s finances, we’ve put together a very basic guide for you.

We look at: where the government gets its money, expenditure, budget deficit and where the ‘extra money’ comes from.

If you’re having flashbacks to business studies in school and feeling a bit scared – don’t worry, you’re in the capable hands of our business reporter Ian Curran.

It’s good to know this background too, for as he says:

Key to the formulation of the government’s spending plan for the coming year is understanding, roughly at least, what sort of condition the country’s finances are in currently.

Hello and welcome to Budget Day. Gráinne Ní Aodha here, taking the Liveblog helm for the next three hours to bring you the main figures as they’re revealed.

The action kicks off in the Convention Centre at 1pm, which you can watch here. Budget ties and mugs of tea at the ready. 

Budget

As was noted in our Morning Memo newsletter earlier, today’s Budget is based on three assumptions:

  1. That there won’t be a Covid-19 vaccine available next year,
  2. That there won’t be a Brexit trade deal, and
  3. That there will not be a second nationwide lockdown, but instead a series of local lockdowns which means that the Irish economy can somewhat keep the show on the road.

If one of these change, it could result in Budget tweaks. 

Christina gives us a glimpse of the modern backdrop to this year’s Budget – though without the history that a FF-FG government Budget deserves.

And speaking of history, here’s an enjoyable traverse through previous Budgets from the Irish Indeopendent’s John Downing, and how scandals sometimes overshadowed the figures.  

TDs enter the Convention Centre ‘Dáil’ just ahead of Paschal’s speech…

Dail Source: RTÉ News Now

Well! The Ceann Comhairle has given a bit of a zinger there – saying that TDs should not leak information from the chamber – that’s if “Morning Ireland has missed anything”. 

Laughs from other TDs, and Paschal stands up for his fourth Budget as Finance Minister – the largest in the history of the State.

Paschal Source: Oireachtas

Donohoe said that from the pandemic, a challenge never experienced before like this, “we will build a stronger and more resilient Ireland”, and that Budget 2021 is a bridge to that future. 

The start of Donohoe’s speech is laying out the stats and figures that paint the overall picture of how Ireland’s economy is doing.

One of particular note is job losses: Donohoe said that an estimated 320,000 jobs will be lost this year, but that 155,000 new jobs will be created next year.

“It is clear that this pandemic has had a disproportionate impact on the young,” Donohoe says. 

Minister of State at the Department of Education Josepha Madigan tweets this view of proceedings out as Paschal Donohoe talks of using the Rainy Day Fund, and how to reduce our the national deficit. 

‘Prudent’ Paschal, as he’s called, says that “building employment” will be a key part of reducing our debt (Tax, of course, is a huge part of how we generate Exchequer funds).

Madigan Source: Twitter

Paschal acknowledges that “there remains uncertainty” about the projections made for this year, due to the threat of “stringent containment measures” which would have “associated Budget costs” if implemented.

Basically, it’s going to cost us all a lot more money if we go into a national Level 5. 

Paschal Donohoe confirms that the Budget is worth an “unprecedented” €17 billion.

€3.8bn of that will go to existing services, including the Department of Health.

Paschal Donohoe says that the Employee Wage Subsidy Scheme will continue during 2021 and the government will decide on how to extend it later, when they know more. 

NEW: A scheme for the arts and hospitality sector

From today until 31 March next year, a new scheme begins, where qualifying businesses closed because of Level 3 restrictions or above can apply for a grant of up to €5,000 a week. 

Businesses will have to apply for it, and payments will cease at the end of the Covid-19 restrictions period.

The Vat rate is being reduced from 13.5% to 9% for the hospitality sector, as was expected.

 

Some other measures that Donohoe is zooming through:

  • No changes to the income tax credits or bands
  • The working from home allowance stays at €3.20 per day, and for those who don’t get paid that, they can now include the cost of broadband in their applications for rebates on heating and electricity costs.
  • The carbon tax is confirmed to be increasing from €26 to €33.50 per tonne, and that it will increase incrementally each year after this until it reaches up to €100 per tonne. 

Confirmed: A packet of 20 cigarettes will increase by 50c – and no change on the price of drink, as predicted. 

One update from earlier that I missed but is worth sharing: The Help-to-Buy scheme of €30,000 is being extended to the end of 2021.

Here’s an interesting one: Ireland and taxes.

Paschal Donohoe says he will publish Ireland’s roadmap on taxes at a later date, and spoke about amending anti-tax avoidance legislation in order to be “fully within the scope of balancing charge rules”.

The Eurogroup president says Ireland needs to work closer with its European colleagues on tax reform, and adds that “change is inevitable”. 

Oh my god, not another Seamus Heaney quote. 

Paschal Donohoe tells the Dáil: “If we winter this one out, we can summer anywhere.”

I thought we were past the State-of-the-nation Heaney combos.

Public Expenditure Minister Michael McGrath tells the Dáil that the main aim of this “ambitious” Budget is to give people hope.

EkNePeUXgAELTO4 Source: Oireachtas

McGrath is announcing an additional €500 million, separate to what Donohoe has announced. This includes:

  • An additional €20 million is going to disability services 
  • A further €10 million is going to voluntary hospices
  • Another €10 million to charities and social enterprises

Other announcements, of a total exchequer investment of over €10 billion, for first time ever:

  • McGrath confirms an extra €4 billion for the health service: this will go towards adding capacity in our health service, eg: 1,146 acute adult beds; 1,250 community beds; 5 million additional home care hours. 
  • Cancer screening is also getting funding – but McGrath didn’t specify how much
  • €38 million is being allocated for mental health services.

mmg Source: Oireachtas

Brexit funds to hire 1,500 staff and upgrades at ports and airports ahead of 31 December were also announced.

The State will use €10 billion in Exchequer renounces across all regions in Ireland, McGrath said.

This includes construction on major roads such as the N4 in Sligo, the N5 in Mayo, and the N22, as well as the purchase of ‘green’ rail carriages.

“This will ensure that our recovery is a green one,” he added.

Housing announcement there from McGrath (Christina has all the details):

  • €5.2bn to housing in 2021, which is an increase of €773m
  • €500m for 9,500 social housing units; 12,750 units added to social housing stock – including leased units
  • €2.4bn to support additional 15,000 HAP
  • €22m for homelessness programmes
  • And most crucially: €110m for an affordable housing and cost rental schemes.

For further education: There will be a further 35,00 extra places in further and higher education, with 1,500 of 10,000 upskilling opportunities in the retrofitting sector.

Department of Enterprise is getting a €1 billion boost to support investment, which Varadkar announced before Paschal Donohoe had even finished speaking. 

McGrath announced a number of Irish language fundings, including €3.5 million for Teilifís na Gaeilge (which was rebranded as TG4 in 1999, dála an scéil).

A €8.9 billion has gone to the Department of Education, with €2bn of this going to special needs education – allows for hiring of 990 additional SNAs, and a further 300 new teaching posts.

McGrath is also aiming to reduce the pupil: teacher ratio from 26:1 to 25:1.

The SUSI grant is increasing by €20 million.

The social welfare packages are worth a total of €510 million.

As previously reported, the living alone allowance is increasing from €14 to €19, and the qualified child payment is increasing by €5 for over 12s and €2 for under 12s.

McGrath confirms earlier reports of those on the Covid PUP qualifying for the Christmas bonus, if they have been receiving the payments for a minimum of four months.

The Justice Department is getting €147 million

  • 500 Garda staff will be hired, with 600 Gardaí 
  • Funding for the inquest into the Startdust tragedy
  • Court service modernisation: Capital investment of over €258 million will be available for ICT in the courts service, the forensic science laboratory, and the development of Limerick prison. 

The Department of Children is getting an additional €120 million:

  • €61 million extra for Tulsa
  • €25 million for the Direct Provision system
  • €638 million investment in early years

That was a bit of a whirlwind of figures: while the opposition hits back at the government’s plan, here’s the link to all that was said there: Budget.gov.ie

Budget 2021

Paschal Donohoe’s statement is in, here are the highlights of what he said:

We have faced numerous difficulties since independence, but never one like Covid-19; an invisible enemy that has caused great suffering, and disrupted so much of what is central to our well-being.

“Yes, the test we face is daunting, further demanding choices await. Yes, the uncertainty and anxiety about the future of lives and livelihoods is great. And yes, we will prevail. We will come through this. And from the ashes of the pandemic, together, we will build a stronger, more resilient Ireland. Budget 2021 is a bridge to that better future.

The evidence is clear that the pandemic has had a disproportionate impact on the job prospects of younger workers. Youth unemployment hit a peak of 64% in May, before falling to 37% in September – figures which were unimaginable just a few short months ago. 

“I am today announcing a total budgetary package of over €17¾ billion, more than €17 billion of which relates to expenditure, and €270 million in taxation measures. This package is unprecedented in both size and scale in the history of the Irish State. 

 

(To be cntd…)

Sinn Féin’s Pearse Doherty said that the 10 cent rise in the minimum wage is “miserly”, particularly after the pandemic has shown what workers are essential.

(He also made some sort of reference to every ‘Tom, Dick, Harry and Sheila’, which I hadn’t heard before but thoroughly enjoyed).

Meanwhile, his party colleague Donnchadh Ó Laoghaire is outside Leinster House reacting to what has been announced.

Donnchadh Source: Twitter

The crux of Pearse Doherty’s Budget complaints to the Dáil now is that much of the government is allocated in the Budget – meaning that businesses have to make decisions now on subjects that the government hasn’t provided detail on. 

And we go live to Paschal Donohoe listening to Sinn Féin criticise his Budget…

Paschal D Source: Oireachtas

So, a quick overview. The 2021 Budget is worth an extra €17.5 billion compared to last year (€66 million this year and over €83 million next year).

  • Covid: €8.5 billion is being provided for Covid-19 supports
  • Department of Health: An extra €4 billion for the health service to carry out 100,000 Covid-19 tests a week, extra bed capacity, and extra staff
  • Department of Housing: €5.2 billion is going here, which is an extra €773 million and a “record level of funding”. An extra €500m will facilitate the construction of 9,500 new social housing units in 2021
  • Department of Education: gets €8.9 billion. A record €2 billion of this is to support children with special needs (hiring an extra 990 additional SNAs and 403 extra teaching posts). Over 300 new mainstream teaching posts will decrease pupil-teacher rations in primary schools from 26:1 to 25:1.
  • Department of Further and Higher Education: 3.3 billion. The SUSI fee grant for postgraduate study is being increased by €1,500 to €3,500.
  • Social welfare: Welfare package is worth €520 million, and includes a host of announcements, including increases to the Living Alone Allowance, the Fuel Allowance, the Carer’s Support Grant, and Qualified Child Payment are all increasing by various amounts.
  • Covid-19 welfare: the extension of the Pandemic Unemployment Payment and Employment Wage Support Scheme to 1 April next year.

Cntd:

  • State pension: The age by which you’re entitled to your State pension was due to increase from 66 to 67 next January, but this has been postponed now.
  • Department of Agriculture: Gets €1.8 billion – an increase of €179 million on this year. Department of Rural and Community Development gets a 7% boost.
  • Infrastructure: For the first time, over €10 billion in Exchequer resources will go to critical projects across all regions of our country.
  • Travel: €10 million to address challenges facing Cork and Shannon Airports.
  • Green travel: Transition to ‘green’ public transport is getting an additional €1 billion in 2021 (McGrath’s announcement was as vague as that).
  • Gaeilge: €14 million will be provided for the Gaeltacht and Irish language sector next year, €8 million will be provided for Údarás na Gaeltachta, and €1.3 million will go to the 20 Year Strategy for the Irish Language. TG4 also gets €3.5 million.

Cntd again:

  • Department of Justice: An extra €147 million is going to Justice, with €7.5 million of this going towards hiring a new Garda fleet of vehicles. A further €27 million will go towards hiring up to 620 new gardaí, and other measures.
  • Department of Children: An extra €120 million going here, with €61 million extra going to Tusla, €25 million to Direct Provision, and a €638 million investment in early-year childcare.
  • Department of Foreign Affairs: An additional €30 million. This funding will see our official development aid package increase to €867 million, McGrath said.

(By the way, McGrath finished his speech with a quote from US President John F Kennedy, who stood in the Dáil and said: “It is that quality of the Irish – that remarkable combination of hope, confidence and imagination – that is needed more than ever today.”)

That’s all from me, a chairde – keep an eye from our continuing coverage as the evening goes on, as the opposition and industries react to this mammoth Budget for next year.

Fan slán. 

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