Government Announce National Economy Recovery Plan

Published on 2 June 2021 at 19:27

The Government has announced a National Economy Recovery Plan yesterday. Taoiseach Micheál Martin, alongside Tánaiste Leo Varadkar and Green Party leader Eamon Ryan announced the Government’s plan, which lays out a road map for the economy as it emerges from the impact of Covid-19 


According to RTE News, 33% of people who already pay property tax will have their tax bill increased by around €100 every year. Furthermore it is estimated that around 3% of homeowners will see a bigger increase, while around 60% of property owners will see no increase. 

Sinn Féin's housing spokesperson Eoin Ó Broin has said the property tax should be abolished, rather than expanded to include new homes built since 2013. He said the property tax was not progressive and there was a more equitable way to approach things according to RTE.


Mr Ó Broin also called for a radical rethink by the Government on its housing strategy, saying the recent homelessness figures suggest that the lifting of the ban on rent increases is already indicating a negative impact. 


Minister Donohoe said all homes will be reevaluated in November this year as part of changes to local property tax. He stated: “We are in a situation where the local property tax base has been broadly unchanged since 2013 and homes that were built since that point have not been paying local property tax.”


Mr Donohoe said the revaluation will be calculated "in such a way that recognises the affordability challenges that many families face at the moment". The minister elaborated that local property tax changes will raise approximately €560 million compared to the current €480-490 million. "Most of that additional yield will be generated by new homes paying local property tax," he added.


The Economic Recovery Plan sets out how the Government will support the full resumption of economic activity and get people back to work. It includes more than 3.5 billion in spending support and just under 1 billion under the EU’s Recovery and Resilience Fund. This will ‘help kick start a jobs-led economy’, Taoiseach Micheál Martin said. 


The government elaborated further by saying that the Pandemic Unemployment Payment will continue at its current level until September, when gradual reductions will begin. It will be reduced by 50 Euro from 7 September, with further 50 Euro cuts planned for 16 November and 8 February.


PUP claims for students will be extended until the start of the 2021/2022 college year, with the final payment on 7 September – in line with normal circumstances where students don’t qualify for unemployment payments while at college. The Enterprise Support Grant of 1,000 Euro for self-employed people returning to work will also be contained to assist self-employed sole traders, leaving PUP, to meet re-start costs.


The Employment Wage Subsidy Scheme will be extended until the end of the year and businesses may apply for reopening payments. For the third quarter of the year, the Government has decided to broadly maintain the status quo for EWSS, including the enhanced rates of support and the reduced rate of Employers’ PRSI with a modification to widen eligibility.


While the EWSS has been extended for the final three months of the year, the Government said it is too early to decide on the operational parameters of the scheme for that period. Further the government added that the Covid-19 Restrictions Support Scheme will be extended beyond 30 June until the end of the year. As firms are able to re-open and exit the scheme, there will be an enhanced restart payment of three weeks at a double rate of payment to support businesses in meeting the costs of re-opening as they exit the scheme.


The maximum re-start payment will be increased to 10,000 Euro per week, allowing businesses to receive up to a maximum of 30,000 Euro. In addition to these supports, a new Business Resumption Scheme (BRSS) will be introduced in September. Businesses whose turnover is reduced by 75% between 1 September 2020 and 31 August 2021, compared with 2019 will be eligible.


The Economic Recovery Plan outlines a number of measures to support some of the worst hit sectors. The 9% VAT rate for tourism and hospitality will be extended until 1 September next year. The plan also includes several supports for the live performance sector, as well as a pilot scheme to guarantee a basic income for artists.


A new scheme, the Music and Entertainment Business Assistance Scheme (MEBAS) will be introduced to support the live entertainment sector. For those that don't make an application for support under MEBAS or don’t qualify for CRSS, a new events sector support scheme will be launched soon to help address a gap in support for SMEs in the sector.


The plan states that 'additional support’ may be required for the aviation sector’s recovery as it opens up. Previously, the Government agreed an €80m funding package for Irish aviation for 2021.


RTÉ further explained that ‘The Government also detailed today how it will spend its €915m portion of the EU's €750 billion Recovery and Resilience Fund to help member states recover from the pandemic. It said the money will be focused on the country's green transition, including a low-cost loan scheme to retrofit homes and in retraining 100,000 people by 2025’.


The Economic Recovery Plan, was, described on Virgin Media News, a plan of ‘give and take’. Whether the Economic Recovery Plan works effectively for the Government in the longer term, it remains to be seen.

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