Budget 2021 the first step in recovery to resilient economy says Laois Offaly Minister of State

Seán Fleming outlines some of the budget details in a speech to the Dáil

Conor Ganly

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Sean Fleming

Laois Offaly TD and Minister of State at the Department of Finance Seán Fleming

Budget 2021 is the first step an economic recovery from Covid-19 that will make Ireland stronger and more resilient, according to Laois Offaly Minister of State Seán Fleming.

The Fianna Fáil TD also acknowledged sacrifices made in Ireland in the fight against the virus in a Dáil speech in which he outlined some of the details of the budget.

"I would like to take this opportunity to acknowledge the significant sacrifices and contribution that has been made by our front line workers and our citizens in the response to overcoming this pandemic. 

"The Government is committed to bringing Ireland out of the worst of this economic downturn, and Budget 2021 is a step toward preparing the way forward for a sustainable and inclusive recovery, and a stronger, more resilient Ireland of all," he said.

TEXT of Dáil Budget 2021 Speech for the Minister of State at the Department of Finance and Laois Offaly TD Seán Fleming on 14 October 2020

A Cheann Comhairle, 

The impact of the COVID-19 pandemic on economic activity in Ireland and globally has been truly unprecedented. It has had a significant impact on the lives and livelihoods of all our citizens.

Against an extraordinarily difficult backdrop, Budget 2021 is framed to tackle the twin challenges of Covid-19 and a no-deal Brexit. It also addresses broader issues facing our economy and society and which underpin the programme for Government – by providing for more homes, better healthcare and a stronger response to address climate change in our society.

TOTAL BUDGET PACKAGE

The total budgetary package amounts to over €17¾ billion, more than €17 billion of which relates to expenditure. The package includes €8½ billion for public services to address the challenges of COVID-19.

Capital expenditure will increase to €10.1 billion, the largest amount that has ever been allocated to invest in schools, homes and public transport. 

Alongside these measures, a Recovery Fund worth €3.4 billion is being established, focusing on (i) infrastructure development; (ii) reskilling and retraining; and (iii) supporting investment and jobs. The Fund will be flexible in its design, allowing Government to respond quickly. 


EARNED INCOME TAX CREDIT

In terms of Income tax - to support SMEs that are the backbone of our domestic economy, and sustain thousands of jobs across the country, the Earned Income Credit has been increased by €150, from €1,500 to €1,650 applying from the current 2020 tax year. 

This increase will give a boost to business owners and is expected to benefit around 230,000 self-employed persons who make up a substantial and important part of our economy. 

This will include, farmers, shop and garage owners, people running small businesses, sole traders and the woman and the man with a van. 

TAX WAREHOUSING

In order to provide additional support for businesses and employers, Budget 2021 provides for an extension of the tax debt warehousing scheme to include repayments of Temporary Wage Subsidy Scheme funds owed by employers and preliminary tax obligations for the adversely affected self-employed. 

Government is aware that not all self-employed taxpayers can benefit from the losses provision introduced in the July Stimulus, therefore Budget 2021 provides for a debt warehousing provision to be extended to include the 2019 balance and 2020 preliminary tax and allow such taxpayers to defer payment for a period of a year with no interest applying; 3 per cent will apply thereafter and will attract no surcharge. 

COVID RESTRICTIONS SUPPORT SCHEME 

The new COVID Restrictions Support Scheme, will also provide targeted and timely support for businesses, impacted by Covid-19 restrictions. 

The scheme is designed to generally apply when Level 3 or higher restrictions are in place as set out in the Government’s Living with Covid-19 Plan. 

Under the scheme, qualifying businesses can apply to the Revenue Commissioners for a cash payment based on 2019 turnover subject to a maximum weekly payment of €5,000. The scheme will be effective from yesterday, Budget day, until 31 March 2021. 


HELP-TO-BUY SCHEME

Housing is a key priority for this Government. In order to support the delivery of new homes and to help hard-pressed first-time buyers, the additional supports available under the Help-to-Buy scheme, which were provided for in the July Stimulus, are being extended for a further year, to the end of 2021.

This increases the level of support available for first time buyers to the lesser of €30,000 or 10 per cent of the purchase price of a new home/self-build property, up from €20,000 and five per cent previously. 

Most Irish people dream of owning their own home, the help to buy scheme has the same objective of assisting people fulfil their dream of owning their own home as the Mortgage Interest Tax relief that applied for many decades and which helped hundreds of thousands of families buy their own home in the past. 

IRISH WATER FUNDING 

In terms of ensuring that the necessary infrastructure is in place to increase housing supply, in Budget 2021 total Exchequer funding to Irish Water will be increased by €108m next year, bringing the total to just under €1.3bn, to ensure that Irish Water has the funds in place to address increased densities and growth in demand for housing, as well as ensuring that issues such as maintenance, and leakage can be fully addressed.


FUNDING FOR SCHOOL BUILDINGS 

The Government has allocated €740 million for Education infrastructure for 2021 under the National Development Plan fund. This allocation will deliver 145 school building projects next year under the Large Scale and Additional Accommodation Scheme, in addition to the over 200 existing projects already set out for 2021, delivering up to 23,000 school places.  

An additional €80mn is also being provided this year, on top of the €75mn in capital funding to schools provided in the July Stimulus package, to ensure the provision for ongoing maintenance works, new school buildings, and improved ICT infrastructure.

FUNDING FOR EDUCATION AND SPECIAL NEEDS 

Budget 2021 will also provide an additional 990 special needs assistants (SNAs) and over 400 special education teachers, across mainstream schools, special classes and special schools. 

This will bring funding for special education to around €2bn, funding over 18,000 SNAs and over 17,500 special education teachers. 

An additional €2m will also be provided to fund an additional 80 occupational, speech and language and behavioural therapists and 30 posts in the National Educational Psychological Services. This will support the phased roll out of the School Inclusion Model, which will ensure students with additional needs get the right supports at the right time.

We are reducing the primary level staffing schedule by 1 point to 25:1. All in all this will involve the employment of 1065 new teachers across the sector. 

STATE INCOME SUPPORT SCHEMES 

The Covid-19 pandemic has had an unprecedented impact on our economy, which is reflected in our labour market, with over 750,000 people currently receiving some form of State support (by way of the Pandemic Unemployment Payment, Employment Wage Subsidy Scheme, and people on the Live Register).

Indeed, in order to continue to provide income supports to workers impacted by the pandemic, we are applying for EU funding towards the cost of the Wage Subsidy Scheme, which will help diversify sources of Exchequer funding. 

I am also conscious that while the Employment Wage Subsidy Scheme is due to remain in place until the end of March, a similar scheme will be provided until end-2021 to provide greater certainty for business. 

CONCLUSION

Before concluding, I would like to take this opportunity to acknowledge the significant sacrifices and contribution that has been made by our front line workers and our citizens in the response to overcoming this pandemic. 

The Government is committed to bringing Ireland out of the worst of this economic downturn, and Budget 2021 is a step toward preparing the way forward for a sustainable and inclusive recovery, and a stronger, more resilient Ireland of all.