In recognition of the challenges facing businesses in terms of liquidity, my Department has engaged with the Department of Business, Enterprise and Innovation as the Government sought to provide both additional direct Exchequer funding for business and to increase the loan finance available under a number of lending schemes.
In April, the Government announced a number of measures which, in aggregate, supported the provision of up to €1bn in liquidity to assist enterprises. Among the measures announced was the Sustaining Enterprise Fund which will be operated by Enterprise Ireland and IDA Ireland and which will provide total funding of €180m by way of repayable advances to businesses.
Scope for higher levels of lending under a number of loan schemes was also announced. Total available funding of €450 under the Covid-Working Capital Loan Scheme, additional funding of €200m under the Future Growth Loan Scheme, and an extra €20m available to Microfinance Ireland to lend to microenterprises under the Microfinance Ireland COVID-19 Loan Scheme were also announced.
In April the Government also announced a temporary €15m Public Service Obligation (PSO) for strategic maritime connections. This will assist businesses with their supply chain.
On May 2nd, Government announced a further suite of measures amounting to c. €6.5bn to further support small, medium and larger business that are negatively impacted by COVID-19. These measures aim to support businesses to restart, reconnect and rehire staff who have been laid off or furloughed. These include:
- A €250m Restart Fund for micro and small businesses who have suffered a dramatic loss in turnover as a result of COVID-19. Companies will receive up to €10,000 based on a rates/waiver rebate from 2019;
- €260m for a three month commercial rates waiver for businesses who have been forced to close due to public health requirements as a result of COVID-19;
- A €2 billion Pandemic Stabilisation and Recovery Fund within the Ireland Strategic Investment Fund (ISIF), which will make capital available to medium and large enterprises;
- A €2 billion COVID-19 Credit Guarantee Scheme to support lending to SMEs for terms ranging from 3 months to 6 years, which will be below market interest rates. The introduction of this scheme will require new legislation.
- The ‘warehousing’ of tax liabilities for a period of twelve months after recommencement of trading during which time there will be no debt enforcement action taken by Revenue. The introduction of this scheme will require new legislation.
- A commitment to local authorities to make up the rates shortfall, so that local authorities can continue provide full services to the public.
A number of measures have been announced by both Enterprise Ireland and IDA Ireland which are designed to assist enterprises to deal with the challenges which now confront them, for example, the €2m Covid-19 Online Retail Scheme administered by Enterprise Ireland.
The Pandemic Unemployment Payment and the Temporary Wage Subsidy Scheme were introduced on a temporary, 12-week basis and are due to expire in mid-June. Reforms made to Illness Benefit and Sick Pay were also introduced for an initial period of 12 weeks.
In the short term, the wage subsidy scheme is supporting the maintenance of the crucial link between employers and their employees. In recognition of the liquidity problems facing businesses, local authorities are working with the most impacted businesses in relation to deferral of payment for commercial rates. The Revenue Commissioners have also set out a series of actions to support small and medium enterprises experiencing cash flow difficulties.
A wide range of policies and schemes have been put in place by Government in order to respond to the major challenges arising from Covid-19. This has been a cross-Government response, with schemes to support different sectors of society being led by different Departments and Offices. The role of the Department of Public Expenditure and Reform is to oversee the expenditure impacts of the response and, as is usual, to ensure that public funds are being utilised in an appropriate way.