Finance Minister Pascal Donohoe and Public Expenditure Minister Michael McGrath outlined the details in the Dáil this afternoon.
The Government has unveiled a €17.75 billion budget package in the Dail.
There will be a €3.4 billion COVID-19 recovery fund aimed at increasing employment by targeting domestic demand.
As part of the stimulus package, the VAT rate for hospitality will be reduced to 9% from November 1st.
The Temporary Wage Subsidy Scheme or a similar scheme will now remain in place to the end of 2021.
A four billion euro fund for the Department of Health will deliver more than 1,100 acute beds, an increase in ICU capacity and 1,250 community beds.
On housing, the help-to-buy scheme has been extended.
There’s also €500 million to build 9,500 new social housing units in 2021.
Carbon tax will increase by €7.50 a tonne from midnight and the same will happen every year out to 2029.
Filling a tank of diesel will cost about €1.50 more, a tank of petrol €1.30.
However, there will be no broad changes to tax credits or tax bands.
There will be some changes to Vehicle registration tax aimed at encouraging people to buy low emission cars.
Cigarettes are to go up by 50 cent, bringing the average cost of a packet of 20 to fourteen euro – however alcohol has been left untouched.
There will also be 50 million euro for the live entertainment industry in a fund.
Finance Minister Paschal Donohoe said the budget is framed with both the Covid-19 pandemic and Brexit in mind:
Public Expenditure Minister Michael McGrath outlined the record increases in Budget 2021’s expenditure:
However, Sinn Fein’s Pearse Doherty says the budget has failed to adequately address the challenges the country is facing from COVID:
Minister for Justice, Meath East TD Helen McEntee has been breaking down how her department’s budget of over 3 billion euro will be spent:
Aontú Leader and Meath West TD Peadar Tóibín says despite a record budget, there are some notable sectors that will not benefit from measures announced today:
Labour says people in rural Ireland haven’t been well served by the budget measures.
Louth and East Meath TD Ged Nash is also concerned the delivery on housing won’t match the promises:
People Before Profit’s Richard Boyd Barrett says the Budget doesn’t do what’s necessary to deal with the threat from Covid:
While Co-Leader of the Social Democrats Roisin Shortall says action on the long waiting lists for non-COVID care and the funding for mental health services fell short:
Drivers will pay an average of two euro more to fill their car with petrol or diesel from tomorrow due to the carbon tax hike, according to the Society of the Irish Motor Industry.
Brian Cooke, Director General of SIMI, says drivers will be paying more for petrol and diesel from midnight:
Environmental Commentator John Gibbons has rejected claims the increase in carbon tax is just a revenue generating measure:
These drivers say the increase on carbon tax was expected but it will impact their day to day living:
Meanwhile, the carbon tax increase of €7.50 a tonne from midnight has been criticised by Irish Rural Link.
CEO Seamus Boland says it will have an impact on people in rural areas:
The Tanaiste says Government is putting a lot of faith in businesses who apply for the covid restrictions support scheme.
The scheme will give up to 5,000 euro per week to businesses forced to close due to restrictions.
The payment will be calculated based on 2019 turnover, or in the case of a new business, projected turnover.
Leo Varadkar says the support will be self-assessed.
Ian Talbot from Chambers Ireland says it will enable firms to plan ahead:
Business owners say reducing the VAT rate for the hospitality sector to 9% was vitally needed.
Richard Hanlon from Busy Feet and CoCo Cafe on South William Street in Dublin says it was a long time coming:
The restaurant sector has been one of the hardest hit since the pandemic began.
CEO of the Restaurants Association Adrian Cummins says they are pleased the government listened to their views and reduced the VAT rate:
The Irish Council for Social Housing believes the budget will have a positive impact on the number of affordable units delivered next year.
5.2 billion euro has been allocated to the housing budget for 2021.
€110 million will be provided for affordable housing package.
Karen Murphy is policy director with the Council – she says there are a range of schemes that will help the government to achieve it’s target of 12,750 new social homes next year:
Sinn Fein’s Housing Spokesperson Eoin Ó Broin claims the government doesn’t have a plan yet to deliver social and affordable housing.
He says there are no initiatives to reassure those who are renting their homes:
The planned increase in the pension age will no longer come into effect next January.
Minister McGrath confirmed a Pensions Commission will instead be established:
Age Action Ireland says fuel poverty will be a far greater threat to the elderly because of the carbon tax increase.
Its CEO Paddy Connolly says 70 per cent of pensioners won’t benefit at all from today’s €3.50 boost to the fuel allowance:
The National Youth Council is ‘delighted’ with the 5 million euro in funding announced for youth services today.
CEO Mary Cunningham says the pandemic has thrown some expensive challenges at them:
The Irish Farmers Association believes Budget 2021 has been a reasonable one overall for its members.
An additional 179 million euro will go to the Department of Agriculture.
There will be funding provided for the establishment of a Food Ombudsman.
IFA President Tim Cullinane says some critical tax reliefs have also been extended:
Smokers group Forest Ireland says the 50 cent increase in the cost of cigarettes is ‘a kick in the teeth.’
Spokesman John Mallon says it could add up to thousands:
Budget 2021 details outlined:
- Total budget package will be €17.75 billion – €17bn in expenditure and €270m in taxation
- €8.5 billion on public services including €2.1 billion on contingency funding
- €8.5 billion for COVID-19 supports
- Capital spending to increase by €1.6billion
- €3.4bn euro recovery fund – This will be aimed at increasing employment
- There will be an extension of the tax warehousing scheme for employers to include those on Temporary Wage Subsidy Scheme (TWSS). The TWSS or a similar scheme will be needed out to the end of 2021. Govt to apply to SURE EU fund to support this which could yield 2.5 billion euro
- There will be a new COVID restrictions support scheme to provide targeted support for businesses that have temporarily closed because of the pandemic. This scheme will operate when level three or higher is in place. The payments will be based on their 2019 weekly turnover. The scheme will be effective from today until March 31st with first payments in mid-November
- VAT for hospitality will be reduced to 9% from November 1st until December 2021
- No broad changes to income tax credits or bands. The ceiling for the second USC rate adjusted up to €20,687. Weekly threshold for higher rate of employers PRSI will go from €394 to €398. Self employed income tax credit to rise by €150 to €1,650. Increase in the Dependent Relative Tax Credit by €70 to €245.
- Carbon tax increases by 7.50 a tonne from midnight. It will increase by €7.50 every year out to 2029 and then by €6.50 in 2030 to achieve €100 per tonne.
- Changes to VRT based on emissions which is aimed at incentivising people to buy low emission cars. Weaker emissions tests on imports will also be changed to bring them up. Current VRT reliefs for hybrids will be allowed to expire in light of the new rates system.
- Pack of 20 cigarettes increase by 50c – pro-rata increase on other tobacco products. €14 now for most popular pack of cigarettes
- Extension of Stamp Duty relief for the transfer of agricultural land to family members until Dec 2023
- No change to the 12.5 per cent rate of Corporation tax
- Change to Capital Gains Tax Entrepreneur Relief so that anyone who has owned at least 5% of the shares for continuous three years will qualify for relief.
- Capital investment of €10.1bn in 2021.
- Commerical rates waiver extended for final Q of this year at cost of €300m
- An additional €44m for Irish Water for infrastructure
- €80 million extra for school building programme, ICT and minor works scheme for Dept of Education
- An extra €20 million for disability services through transforming lives programme
- €10 million in this year’s funding for voluntary hospices
- €2.1 billion of COVID funds will be held in contingency
- €340 million of voted expenditure will be spent on Brexit supports in 2021 – includes money for ports and airports and 500 staff for customs
- Capital spending to get another €600 million – total capital expenditure will rise over €10 billion for the first time ever
- An extra €4 billion for the health service
- An extra 1,146 actue beds – increase in critical care beds to 321 by end of year from 255 pre-COVID. 1,250 community beds in 2021 including 600 new rehabilitation beds
- 5 million extra homecare hours
- €50 million for new drugs and €25 million for Healthy Ireland and National Drugs Strategy
- €38 million for mental health under sharing the vision
- €100 million for new disability services
- €270 million for Higher Education for 20 building projects
- €132 million for National Broadband Plan
- €131 million for Defence Forces capital expenditure
- New multi-annual capital funding of €500 million over 5 years for a Shared Island Initiative
- €5.2 billion for Dept of Housing – increase of €773 million on 2020
- €500 million for capital expenditure on housing for 9,500 new social housing units in 2021
- €65 million for deep retrofitting of existing social housing
- Expansion of HAP tenancies. 800 more rental accomodation scheme tenancies – 85,000 tenancies supported through next year
- €22 million for homelessness programmes including additional beds
- €110 million for affordable housing package for affordable and cost rental
- Land Development Agency will have €1.2 billion of funding available when it’s set up
- €210 million under Rebuilding Ireland Home Loan scheme
- €29 million for heritage sites
- €1.1 billion to Department of Enterprise – Credit guarantee scheme, LEO supports and developing R&D
- €55 million for a tourism business support scheme and 5 million for toruism product development
- €50 million for live entertainment supports and arts council funding to increase it to €130 million.
- An additional €100 million of carbon tax revenue will be put towards energy efficiency of our homes
- An additional €1 billion for public transport in 2021
- Department of Education will have an €8.9bn euro budget – €2bn of that will be put towards children with special education needs, 900 additional SNAs and 403 additional teachers
- €14 million extra for the Gaeltacht and Irish language to €78 million total.
- €3.3 billion budget for Higher Education Dept
- €50 million fund to give all third level full time students €250
- Fuel allowance up by €3.50 a week to €28
- Planned pension age increase in Jan 2021 WON’T proceed
- Xmas bonus to be paid to those on PUP and other welfare if they’ve been on that for 4 months instead of usual 15
- €179 million extra for Department of Agriculture
- 7% increase in budget for rural affairs including town and Village Renewal Scheme
- €5 million for new digital hubs in rural Ireland
- 620 new Garda recruits & 500 new civilian staff
- Further ICT for the Gardaí and courts services under €258 million for them
- €120 million increase for Department of Children, including €61 million for Tusla
- €638 million investment in further years education and childcare in 2021
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