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5 biggest takeaways from Budget 2021


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Finance minister Paschal Donohoe (left) and public expenditure minister Michael McGrath arrive at Government Buildings in Dublin before outlining details of Ireland's next budget. Photo: Liam McBurney/PA Wire

Finance minister Paschal Donohoe (left) and public expenditure minister Michael McGrath arrive at Government Buildings in Dublin before outlining details of Ireland's next budget. Photo: Liam McBurney/PA Wire

Finance minister Paschal Donohoe (left) and public expenditure minister Michael McGrath arrive at Government Buildings in Dublin before outlining details of Ireland's next budget. Photo: Liam McBurney/PA Wire

1. The heat is on

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Price hike: The cost of petrol and diesel rose from midnight. Photo: Niall Carson/PA Wire

Price hike: The cost of petrol and diesel rose from midnight. Photo: Niall Carson/PA Wire

Price hike: The cost of petrol and diesel rose from midnight. Photo: Niall Carson/PA Wire

Budget 2021 sees carbon tax hikes hit motorists now, but increases in home-heating costs won't kick in until the summer.

The expected €7.50 increase in carbon tax has been delivered, but it won't affect costs associated with heating the home until after May 1, 2021.

That means no rise in coal, gas and home-heating oil costs until after the winter, which will be grim enough given the ongoing pandemic.

However, the changes saw the cost of petrol and diesel rise from midnight last night.

The carbon tax increase is expected to raise €108m next year.

Planned increases over the next decade are part of Ireland's contribution to the fight against climate change. The tax will eventually reach €100-per tonne by 2030.

Public Expenditure Minister Michael McGrath promised that the funds raised will help protect vulnerable people as well as funding the retro-fitting of homes for energy efficiency.

The fuel allowance for vulnerable households is being increased by €3.50 per week to €28. This is to compensate those on lower incomes for the additional costs they're likely to face from increased carbon tax.

2. The ambitious road to recovery

Funding of €10bn will be spent on "critical projects across all regions of our country" according to Mr McGrath.

This includes spending on road projects like the N56 in Donegal, the N4 in Sligo, the N5 in Mayo, and N22 and Dunkettle Interchange in Cork.

Forty-one intercity rail carriages are to be bought and there are plans to sign contracts for up to 600 electric carriages as part of the DART+ project in Dublin, as Mr McGrath put it, "to ensure our economic recovery is a green one".

He said money will be spent to progress the long-promised BusConnects and Metrolink projects.

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Separately, an "unprecedented extra €4bn" for the health services is to go towards hiring up to 16,000 additional posts. There are plans for 1,146 additional beds in hospitals and an increase in critical care beds from 255 pre-Covid to 321 by the end of 2021.

Up to 620 new gardaí are to be recruited to bolster the force, which currently stands at 14,500.

There is to be 500 civilian staff hired to free up gardaí for frontline duties. €7.5m will be spent on vehicles for the Garda fleet. More than 300 primary school teachers will be hired and almost 1,000 new special needs assistants are to be recruited.

3. A small dose of Christmas cheer

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Cheer: More than 1.4 million people on welfare payments will get a Christmas ‘bonus’

Cheer: More than 1.4 million people on welfare payments will get a Christmas ‘bonus’

Cheer: More than 1.4 million people on welfare payments will get a Christmas ‘bonus’

The full Christmas bonus will be paid this year.

More than 1.4 million people receiving welfare benefits including the State Pension and Pandemic Unemployment Payment (PUP) will get a full extra week's payment on the first weekend of December.

The bonus is usually only paid to people in receipt of welfare and jobseekers payments for longer than 15 months.

Mr McGrath said that given the "unprecedented circumstances", for this year only, the 15-month requirement is being reduced to four months.

He said the vast majority of people currently on the PUP will get a Christmas bonus if they remain out of work at the start of December.

The Christmas bonus was scrapped for a number of years after the last recession, so it was a big call for the Government to pay it amid the economic turmoil of the Covid-19 pandemic.

Ministers faced pressure from backbench TDs to make the payment.

Doing so was one of the last things decided as senior ministers finalised the Budget on Monday night.

The Coalition - and local businesses around the country - will be hoping it offers a boost to Irish retailers as it is used to buy Christmas turkeys and gifts.

4. A sweetened pill

There will be support payments of up to €5,000 per week for businesses hit by Covid-19 restrictions.

The new Covid Restrictions Support Scheme (CRSS) will be on offer for businesses impacted by pandemic restrictions, with payments of up to €5,000 per week available.

The scheme is to operate while Level 3 restrictions - or higher - from the Government's 'Living with Covid-19' plan are in force.

The sectors that currently qualify are accommodation, food and the arts, recreation and entertainment.

Finance Minister Paschal Donohoe said that if higher levels of restrictions are brought in, other sectors may qualify.

Payments will be based on a business's 2019 average weekly turnover.

They will have to prove their turnover has been severely impacted.

Tánaiste and Enterprise Minister Leo Varadkar said the CRSS "will make a really big difference and will be paid in addition to the Employment Wage Subsidy Scheme (EWSS)".

Mr Donohoe said the EWWS is set to continue until March 31.

However, he said: "A similar type scheme will be needed to the end of 2021 to provide businesses with greater levels of certainty in the most uncertain of times."

He added that "there will be no cliff edge to this vital scheme", and stated that decisions on how to extend it will be made "when economic conditions are clearer".

5. No clarity for sports bodies

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Funds: A Covid-19 sign at Páirc Táilteann in Navan, Meath. Photo: Brendan Moran/Sportsfile

Funds: A Covid-19 sign at Páirc Táilteann in Navan, Meath. Photo: Brendan Moran/Sportsfile

Funds: A Covid-19 sign at Páirc Táilteann in Navan, Meath. Photo: Brendan Moran/Sportsfile

A package of €45m was announced for sports, though no specific funding was announced for under-pressure organisations like the GAA, Football Association of Ireland (FAI) or Irish Rugby Football Union (IRFU).

Those organisations are sharing €40m announced earlier this year. Sport Ireland - which allocates State funding to sporting bodies, including the major field sports - gets an extra €36m for next year.

Additional funding of €7m will go towards "large-scale sports infrastructure" with swimming pools identified as one area for the expenditure.

Initiatives to attract major sporting events to Ireland will be funded to the tune of €2m.

There is a €50m package of support for the live entertainment sector which will see music venues and theatres able to access funding to help cover the cost of gigs and events with reduced capacity due to Covid-19 restrictions.

The film industry has been "badly affected" by the pandemic-related shut-downs, according to Mr Donohoe.

As a result, he announced that the Section 481 tax incentive aimed at boosting filming in the regions will be extended for an extra year until the end of 2023.

He also announced work is going to start on developing a tax credit for the lucrative digital gaming sector.

The aim is for it to be in place from January 2022 onwards.

He said the sector has seen "exponential growth" in the past decade and there are potential synergies with the established film and animation sectors to support job creation in video games.

6. Looking North

Taoiseach Micheál Martin's 'Shared Island' initiative - to boost cooperation with the Northern Ireland Executive - is to get capital funding of €500m over five years.

Mr McGrath did not set out in detail what this money will be spent on.

Instead, he said it will be used to "foster new investment and development opportunities on a North/South basis and support the delivery of key cross-border projects as set out in the Programme for Government (PfG)."

Possible projects listed in the PfG include the A5 Derry road project, the Ulster Canal connection from Clones to Upper Lough Erne, and a Sligo to Enniskillen Greenway.

Later, Mr Martin offered more information, saying "the Government is providing the resources to deliver on our commitment to build a shared island underpinned by the Good Friday Agreement".

He said the funds will open the way for investing in new all-island initiatives in areas such as research, health, education and the environment.

Mr Martin said it would seek to address the particular challenges of the northwest and Border communities.

He spoke of achieving greater connectivity on the entire island and enhancing the all-island economy and all aspects of North-South cooperation.


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