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July Stimulus Package: Taoiseach announces €5.2bn economic package, with VAT cut from 23pc to 21pc and help-to-buy scheme expanded

  • VAT will be cut from 23pc to 21pc

  • Stay and Spend initiative to see holidaymakers and diners spend up to €625 to claim back maximum €125 tax rebate

  • Help to Buy scheme for first time buyers to be increased from €20,000 to €30,000

  • Employment Wage Support Scheme will succeed the Temporary Wage Subsidy Scheme and run until April 2021

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Taoiseach Micheal Martin arrives at Dublin Castle for a cabinet meeting. Photo: Niall Carson/PA Wire

Taoiseach Micheal Martin arrives at Dublin Castle for a cabinet meeting. Photo: Niall Carson/PA Wire

Taoiseach Micheal Martin arrives at Dublin Castle for a cabinet meeting. Photo: Niall Carson/PA Wire

Taoiseach Micheal Martin, Tánaiste Leo Varadkar and Minister Eamon Ryan will launch the Jobs Stimulus at Dublin Castle this afternoon - follow the Independent.ie live blog for all the latest updates from our political team.

20.25

Drinks Ireland, the Licensed Vintners Association (LVA) and the Vintners Federation of Ireland (VFI) have said that the stimulus is a "start" for others.

According to the three groups, the VAT reduction does "nothing" for the 3,500 wet pubs that remain closed.

Drinks Ireland, the Licensed Vintners Association (LVA) and the Vintners Federation of Ireland (VFI) said that the Government’s July Stimulus package will "deliver a stimulus for some but expressed a deep concern for the 3,500 pubs that remain closed today."

"The reduction in VAT is a start but we need to consider the reality of the new business model within which pubs are operating - Government guidelines and Covid measures limit the capacity of pubs to trade which means demand is reduced, capacity is significantly decreased and consumers ability to spend in pubs is capped," said Donall O’Keeffe, Chief Executive, LVA.

Padraig Cribben, Chief Executive, VFI said: "While the measures announced are welcome, they are only a start. The temporary reduction in the VAT rate on on-trade alcohol will assist in the short term but it will end. We need to consider the pubs that are closed, we need to get them open and provide support to get people back to work."

Patricia Callan, Director at Drinks Ireland says that the supports need to be assessed and their impact reviewed.

"The environment in which the drinks and hospitality industry is operating is abnormal and this is set to continue. We must look to the Covid measures implemented in the EU and consider their impact while also reviewing the progress of our own measures announced today," she said.

20.19

Childcare providers representative group Seas Suas has welcomed the extension of the Temporary Wage Subsidy Scheme.

“This support, newly formulated as the Employment Wage Support Scheme, will give some level of certainty to ELC providers and their staff during this challenging period. Demand is reduced and costs have been – and will continue to be - significant in adapting services to operate within the realities of Covid-19," said a spokesperson.

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The announcement marks a "beginning for the end of wage supports".

“We therefore need to prioritise establishing a fully funded and comprehensive long-term financial framework that provides for a quality, affordable and sustainable childcare system in Ireland," the spokesperson added.

19.28

Irish hoteliers have expressed concerns that the July Stimulus "does not go far enough".

The Irish Hotel Federation has raised "serious doubts" over the effectiveness of the Stay and Spend scheme.

"While measures to stimulate consumer demand are welcome, we have serious doubts about how effective the ‘Stay and Spend’ tax credit scheme will be in stimulating consumer demand.

"It seems overly cumbersome and convoluted, and we are urgently seeking further clarification from the Government on how the measure will operate,” said IHR President Elaina Fitzgerald Kane.

"“We are disappointed that the Government failed to deliver a reduction in tourism VAT. This is a missed opportunity given how highly effective the previous reduced VAT rate was in promoting increased employment," she added.

Ms Fitzgerald Kane also raised concerns over the rates waiver.

“There is a concern that the rates waiver does not going far enough and we hope that this is addressed as part of the national economic plan in line with what is being done in the UK," she said.

19.06

Accounting organisation KPMG welcomed the €1bn increase in spending.

“This underpins the need to continue to invest in enhancing the infrastructure that enables our competitiveness," said Michele Connolly, Head of Infrastructure & Government at KPMG in Ireland.

"The immediate programme gives effect to some of the themes in the Programme for Government with enhanced spending on cycling and pedestrian infrastructure plus €100m on an Energy Efficiency National Retrofit Programme."

She added that there are "blockages" to building that would speed up project delivery.

"However there are blockages to the delivery of infrastructure projects that if they were addressed, would speed up project delivery in areas such as housing, health and energy at no additional cost to the State.”

18.42

Engineer representative group Engineers Ireland have welcomed the Stimulus, saying that is a "major opportunity to make further inroads in the transition towards a cleaner and more sustainable future".

Engineers Ireland’s Director General Caroline Spillane said that seeing extra funding in education and apprenticeships is welcomed.

"Investment in education at third-level will be critically important to safeguarding Ireland’s engineering graduate pipeline. Our engineering graduates will play a central role in creating a sustainable future for Ireland," she said.

"At this challenging time, investment decisions must be evidenced based and Engineers Ireland is committed to channelling the expertise of our professional engineering membership in finding practical and cost-effective solutions to the significant societal challenges we face," she added.

18.30

The Small Firms Association has welcomed the package, saying that it will allow businesses to access "working capital and investment funds they need".

Small Firms Association Director, Sven Spollen-Behrens said: “The lowering of the Standard VAT rate will benefit the economy and especially the retail and hospitality sector, which have been so hard hit.

“Going forward local authorities and small businesses, will need to work more closely together to attract Irish tourists and shoppers to their village centres and amenities to spend their “Staycation Subsidy," he said.

He added that zero interest SME loans will allow the business community to recover.

"Changes to the COVID-19 Credit Guarantee Scheme and 0% interest for the first year of SME loans will allow more affordable credit get to the small business community so they can recover and survive the ongoing health crisis," he said.

“These revamped measures combined with a streamlined application process, which should be in place for all COVID-19 business supports, will help to get more cash to the small firms that really need it," he added.

18.07

Business lobby group Ibec has said that the package is "timely confidence and investment boost".

Ibec CEO Danny McCoy said: “On behalf of the Irish business community, today’s stimulus package of increased public spending, investment and tax supports is a welcome and important step in rebooting the economy."

He added that it is "imperative" that the package is now be delivered.

“The suite of financial supports announced today, including the amendments to the Restart Grant and Covid-19 Credit Guarantee scheme, will bring huge relief to businesses who are continuing to overcome the challenges posed by Covid disruption.

"It is crucial that the various supports available are now delivered more efficiently than has been the case to date," he added.

17.53

Revealed: From VAT cuts to Help-to-Buy extension - the key points from the Government's July Stimulus Package

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Taoiseach Micheál Martin, Tanaiste and Minister for Defence Leo Varadkar and Minister for Climate Action, Communications Networks and Transport Eamon Ryan at Dublin Castle today for the post cabinet press briefing. 
Pic Julien Behal Photography.

Taoiseach Micheál Martin, Tanaiste and Minister for Defence Leo Varadkar and Minister for Climate Action, Communications Networks and Transport Eamon Ryan at Dublin Castle today for the post cabinet press briefing. Pic Julien Behal Photography.

Taoiseach Micheál Martin, Tanaiste and Minister for Defence Leo Varadkar and Minister for Climate Action, Communications Networks and Transport Eamon Ryan at Dublin Castle today for the post cabinet press briefing. Pic Julien Behal Photography.

Taoiseach Micheal Martin, Tánaiste Leo Varadkar and Minister Eamon Ryan have launched the Jobs Stimulus at Dublin Castle this afternoon.

Philip Ryan reveals everything you need to know from a reduction in VAT to the expansion of the Help-to-Buy scheme.

17.46

A group representing family businesses has given a cautious welcome to July Stimulus Package.

Executive Director, Family Business Network Ireland John McGrane, said that more must be done to reduce the VAT rate even further.

“Although family businesses commend the introduction of the new Stay and Spend tax rebate and the other new measures aimed at protecting the hospitality and tourism sector, Government can and must do more. The scale of the crisis facing the sector industry requires bold action.

"To protect the viability of family businesses in the sector, we call on Government to replicate the UK’s decision to reduce VAT for the hospitality sector to 5%," he added.

17.41

The Irish Homebuilders Association (IHBA) has welcomed the improvement to the Help to Buy Scheme and the temporary VAT reduction announced in the Government’s stimulus package.

James Benson, spokesperson for the IHBA said: “the supply of new homes in Ireland is running well behind need and average earners cannot afford homes.

"The temporary reduction of VAT of from 23% to 21% will make a modest contribution to lower the heavy tax burden on new buildings. However, the limited time period for this cut is disappointing," he added.

17.38

On pubs, Tánaiste Leo Varadkar says that pubs can avail of four measures when reopening

  • A restart grant of at least €4,000
  • no commercial rates
  • VAT reduction w
  • if they make a loss this year and profit this year, they can get a tax back

He says that this is 'not a bad deal for our publicans'

17.29

There will be a 0pc interest for first year of SME loan and the Restart Grant for Enterprises is being extended and expanded. This has been called a "lifeline" for the SME sector by Chartered Accountants Ireland.

Dr Brian Keegan, Director of Public Policy, Chartered Accountants Ireland said: "The Institute has warned against any disregard for public health advice, and a survey of almost 20,000 chartered accountants in Ireland identified worries over staff and customer safety as the top issue on re-opening. Finding this balance will be critical in the weeks and months ahead.”


17.25

The Stay and Spend scheme will come in after the summer is over due to "operational issues, techonology systems have to be up and running" says Micheal Martin..

We want to give the support when it's most needed, in the months post holiday season, when people take weekend breaks, said the Taoiseach.

This will "keep income flowing in that sector" during the winter months, he added.

17.20

Meanwhile, Justice Minister Helen McEntee has confirmed a €24m fund to support projects for An Garda Síochána, the Courts Service and the Irish Prison Service.

This will see:

  • An Garda Síochána will receive an additional €11m to modernise, lease and refurbish additional space for Garda stations

  • Irish Prisons Service will receive €8m to increase security and safety in prisons

  • The Courts Service will receive €5m to minimise backlog of criminal trials due to pandemic and modernise existing facilities

17.15

On students, Mr Martin said that there will be more postgraduates this year and more apprenticeships.

Eamon Ryan said that there is not a "one year solution" but it will have to be worked out over time.

17.14

The key challenge ahead is to learn to live with Covid, said Taoiseach Micheal Martin.

Budget 2021 will be our next challenge, he added.

17.10

Leo Varadkar: If you are self employed or a business and you made a profit last year but a loss this year, you can claim back some of the Corporation Tax or Income Tax you paid last year, said the Tánaiste.

17.10

The Tanaiste said the Government wanted to incentivise people to spend money in the economy and help people get back in to jobs.

17.03

Eamon Ryan: We can and will get through the pandemic and we can build back greener and better for the sake of our communities, our children and the planet.

17.02

Retrofitting homes is labour intensive work- we're sending a signal that it's time to start hiring and training in this sector, said Eamon Ryan.

17.01

Minister Ryan said the economy will "look different" as we recover from the effects of the Covid-19 pandemic as more people work from home.

Stay and Spend tax rebate will support businesses to survive, says Minister Eamon Ryan.

16.57

Business owners have "shown remarkable grit and adaptability throughout the pandemic", Mr Varadkar tells business owners.

This new government is "backing business", he adds.

16.57

The Dáil will tonight see a vote on the Credit Guarantee amendment bill will establish a €2bn low cost amendment fund.

This is the "biggest" guarantee scheme in the amendment of the State, according to Leo Varadkar.

16.54

A six month reduction in VAT rate will be especially beneficial for the retail sector, Leo Varadkar has said.

16.53

Extended Wage Subsidy Scheme will run into the end of March, the Tánaiste has confirmed.

16.52

Tánaiste Leo Varadkar: The package will total €7.2bn - €5bn and another €2bn taken out in loans

16.48

Socially and economically, essential moves such as opening up schools will have additional costs, according to the Taoiseach.

16.46

Taoiseach Micheal Martin has announced an "unprecedented" stimulus package at Dublin Castle this afternoon.

The package of 50 measures will be worth €5.2bn.

16.40

Philip Ryan

Employers will be paid €3,000 for every apprentice they hire under a scheme developed by Higher Education Minister Simon Harris.

They will be paid €2,000 in the first year and €1,000 in the second year if the apprentices is kept on.

16.08

Philip Ryan

A new scheme developed by Higher Education Minister Simon Harris will see the State pay companies for hiring apprentices.

15.54

Hugh O'Connell

The surprise decision to cut the standard rate of VAT from 23pc to 21pc was a "late" move by the coalition parties, according to a Government source. It appears the decision - which will benefit the vast bulk of consumers - was only made in the last few hours as ministers scrambled to finalise the package ahead of the Cabinet meeting in Dublin Castle.

The move may prove popular with consumers and many businesses - but it will still disappoint the tourism and hospitality industry that had argued for a cut to the lower rate in recent weeks.

15.39

Philip Ryan

The standard rate of VAT on food, clothes and car repairs will be reduced from 23pc to 21pc for a number of months.

15.37

Philip Ryan

Help to Buy scheme relief for first time buyers to be increased from €20,000 to €30,000 on the price of new homes.

15.15

Revealed: Three tier change to Pandemic Unemployment Payment with new wage support scheme in works

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Social Protection Minister Heather Humphreys insisted the welfare benefit must be kept in place until next year. (Photo: Julien Behal/PA)

Social Protection Minister Heather Humphreys insisted the welfare benefit must be kept in place until next year. (Photo: Julien Behal/PA)

Social Protection Minister Heather Humphreys insisted the welfare benefit must be kept in place until next year. (Photo: Julien Behal/PA)

The Pandemic Unemployment Payment (PUP) will be reduced and split into three separate rates in September but will be extended until April next year, Independent.ie can reveal.

Social Protection Minister Heather Humphreys has secured substantial concessions in the July Stimulus Package to extend the payment for those who lost their jobs during due to the Covid-19 pandemic.

15.05

Couples on a staycation can claim back up to €250 on bills

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This is likely to be the Great Summer of Staycations and day trips. Stock picture

This is likely to be the Great Summer of Staycations and day trips. Stock picture

This is likely to be the Great Summer of Staycations and day trips. Stock picture

Couples will be able to claim back as much as €250 on hotel and restaurant bills under the Government's staycation subsidy.

The tax-back scheme is to run from October this year until April 2021 and will apply to hotels, food and non-alcoholic drinks.


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