The pandemic has caused untold damage to lives and livelihoods, with many businesses severely impacted by the restrictions needed to ensure public health safety during the pandemic. Our response to COVID-19 will continue to assist those businesses affected.
Budget 2021 provides a significant additional package of tax and expenditure measures to build the resilience of the economy and to help vulnerable but viable businesses across all sectors.
These measures are in addition to the July Stimulus, which was a substantial financial package to stimulate our economy worth more than €5 billion, including €2 billion in loan guarantees for the new Credit Guarantee Scheme.
Budget 2021 is unprecedented in terms of its scale at almost €90 billion. Its purpose is to protect lives and livelihoods of everyone in the state.
A six-month reduction in VAT was introduced, going down from 23% to 21%, and from 13.5% to 9% which will benefit the hospitality, entertainment and hairdressing sectors, together with a range of additional public capital investment measures to support the domestic economy.
Also in Budget 2021, the Covid Restrictions Support Scheme was launched through Revenue, offering a targeted, timely and temporary sector-specific support to businesses forced to close or trade at significantly reduced levels due to COVID. As with all support schemes, in designing the CRSS and providing for it in legislation, it was necessary to set appropriate anchor points for eligibility.
We are investing in a range of working capital and longer term funding options for SMEs, with strong demand for medium and long term finance through Credit Guarantee Scheme and Future Growth Loan Schemes, at interest rates of below 4% p.a.
The level of assistance now being provided to businesses across all sectors is unprecedented and ahead of that available in other jurisdictions. In moving to the level 5 restrictions, we ensured that we had an appropriate mix of measures in place to support workers and businesses, so businesses can reopen and restore employment as we suppress the virus.
I share the Deputy’s concern about businesses that might not be eligible for the CRSS or other measures announced in the budget, such as the €50 million fund for live entertainment. I have asked my officials to conduct work along with officials from the Department of Finance and the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media, regarding how many businesses might be in this position and to report back to me with proposals.