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National Economic Plan: Property tax, PUP and metropolitan railway lines – everything we know 

  • Taoiseach and Tánaiste making recovery announcement
  • Property tax, Vat rate for tourism industry and PUP payments among the announcements
  • ‘Our economy is going to take off like a rocket’ – Varadkar
  • Metropolitan railway line for Cork – to also be rolled out in Limerick, Galway and Waterford

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Taoiseach Micheal Martin

Taoiseach Micheal Martin

Taoiseach Micheal Martin

The Government will today publish its National Economic Recovery Plan – a wide-ranging plan which contains €3.5bn in spending commitments aimed at workers and business owners impacted by the pandemic.

Taoiseach Micheál Martin said the core objective of the plan is to “restore, and then go beyond pre-pandemic employment levels.”

He quotes Seán Lemass, saying: “Social and economic progress must go hand and hand. They are not opposites. They are two sides of the same coin.”

Mr Martin said the plan “provides certainty to businesses” and provides a roadmap to people to help return to work.

He said the pandemic has provided a “dramatic and unprecedented social and economic shock” to Ireland and the world.

The Taoiseach said that he is aware the pandemic has “not affected everyone equally”, and said that many of those who were working contact facing jobs were “on lower pay and are younger”. As such, he said his government is determined to “improve living standards for all”.

Tánaiste Leo Varadkar says that all things going to plan, he believes Summer 2021 is a summer “we can look forward to”.

“Our economy is going to take off like a rocket in the months ahead,” he said.

Mr Varadkar added that: “To business people today, I say that the government is on your side. We have your back for the period ahead.”

He said that he was extending Section 12A of the Redundancy Act. However, he noted that this is the last extension, and that people on the PUP who are not back to work after it expires will be able to trigger their redundancy package.

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Property tax

Around 100,000 people are set to face local property tax bills for the first time with the Government ending the exemption from the charge on new homes built since 2013.

There will also in be increases of up €100 or more for 36 pc of people who have been paying property tax since it was introduced.

Finance Minister Paschal Donohoe brought a memo to Cabinet setting out significant changes to the property tax system which will be introduce later this year and raise €560m in revenue.

The Government has delayed making changes to the tax on homes for a number of years but are now set to signal major reforms to a system which has remained largely unchanged since it was introduced eight years ago

Central to the changes will be ending the exemption from property tax on new homes built since 2013. The move will see around 100,000 people hit with property tax bills for the first time.

A new valuation system for property tax will also see higher bills for homeowners who have been paying the charge since it was introduced.

SINN Féin has said the local property tax should be abolished rather than increased for tens of thousands of homeowners.

Speaking at Leinster House on Tuesday, the party’s housing spokesman Eoin Ó Broin said the LPT is “one of the most regressive taxes that was ever introduced”.

He said it took no account of a person’s ability to pay, citing the example of a pensioner who may be asset rich in terms of their home, but income poor.

9pc VAT rate:

The 9pc VAT rate for the tourism and hospitality sectors looks set to be extended until September next year under plans being discussed by Cabinet.

Transport

Transport Minister Eamon Ryan added that today is an “important day” for the people of Cork, as he announces a metropolitan railway network. He says it won’t just go to Cobh, but to Mallow, and there will be 30,000 houses zoned along near the stations.

“And we’re going to do it in Limerick, and Waterford, and Galway as well.”

The Taoiseach said that Mr Ryan has been “very passionate” about the Cork railway plan, saying, “you get a far more efficient return on investment and expenditure”.

“I think it will be a gamechanger in terms of how Cork develops… I think it’s a very good model on what should happen throughout the country,” he said.

Outdoor summer

Mr Martin also addressed how local authorities have responded to the reopening of society, saying he wishes to see more people “generally enjoying civic society”.

“Some local authorities have moved very quickly in terms of pedestrianisation,” he said, citing Cork as an example.

Mr Ryan said that: “I think it’s important that councils get the message that we want an outdoor summer.” He added that it’s been made clear to local authorities that should they need extra funding for the likes of pedestrianisation or bins, they can ask for it.

PUP: 

The Pandemic Unemployment Payment (PUP) is to be phased out in three stages from September.

The first cut will see €50 taken off the top three rates of the pandemic support. That means those now on €350 a week will see their payment reduced to €300 in September.

A further €50 reduction is planned for November, followed by a final cut of the same amount in February next year.

Once the final cut is implemented, it will mean the pandemic support will be reduced to the same rate as the €203-per-week Jobseeker’s Benefit.

The PUP scheme is expected to be closed off to new entrants from July 1, while students returning to studies in September will also stop receiving the payment.

The number of people in receipt of the pandemic payment has dropped significantly in recent weeks but still stands at 309,000.

PUBLIC anger over the plan to reduce the pandemic unemployment payment from September will force the Government to reverse the move, Labour leader Alan Kelly has said.

Mr Kelly said it was “completely unacceptable” to Labour that the PUP would be tapered off from September after the Coalition announced plans to reduce the €350 weekly payment down to €203 from September 7.

“There are so many unknowns in relation to this pandemic, this pandemic continually surprises us and how the Government can give a guarantee that they will not need to use these payments long-term is not something that we feel is sustainable,” Mr Kelly said at Leinster House on Tuesday.

Business supports

Supports for businesses are expected to be extended until the end of the year. The Employee Wage Subsidy Scheme (EWSS) will run until June next year.

The suspension of redundancy payments will be extended until November while the commercial rates waiver will remain in place until at least September.

A new business resumption supports scheme will come into place in September.

Covid Restrictions Support Scheme

The Covid Restrictions Support Scheme (CRSS) is to be extended until the end of the year. The scheme offers businesses up to €5,000 a week if they were forced to close due to Covid-19 restrictions and there is double weekly payment when they are returning to work.

There was some discussion in Government about increasing the exit payments.

Events

A pilot income guarantee scheme for artists will be introduced – though no specific detail has been provided as yet.

Green initiatives 

The National Economic Recovery Plan will also outline how the Government will spend almost €1bn in funding it received under the European Recovery and Resilience Facility.

More than half of this funding will be committed to green initiatives aimed at ensuring the Government reaches its carbon emission targets.

This will include a loan scheme for retrofitting homes, which it is hoped will see banks and financial institutions offer loans with 3.5pc interest rates to homeowners seeking to make their houses more environmentally sustainable.

The EU funding will be used to provide risk protection to banks and financial institutions that offer retrofitting loans at low rates.

Education

Higher Education Minister Simon Harris will spend €40m on a transformation fund for technological universities (TU) across the country and €70m for research projects in the areas of climate action and digital infrastructure.

A €225m package for further and higher education will include continued investment in skills – both upskilling and reskilling – which will be essential for those whose jobs are unlikely to return.

A new Green Skills Action Programme will be launched, including an online green skills programme and an expansion of the retrofitting scheme to include an additional 5,000 people.

There will also be training to help those in construction make buildings more usable and sustainable in the context of an ageing population and for people with disabilities.

There will be targeted supports for those who have lost their job as a result of Covid-19 and are unable to return to their previous employment following the pandemic, including training them in new digital skills.

Under the TU fund, higher education staff will be upskilled in digital technology, outreach and blended learning, as well as a reform of local and regional enterprises to develop pools of graduates with the skills and training required.

A €66.5m package to boost digital teaching and learning in schools is proposed in the National Recovery and Resilience plan.

The focus of the programme is to support high-speed broadband connectivity in all primary schools, and to fund interventions to address the digital divide in schools. The latter would involve the provision of devices and improvements n ICT infrastructure.

Funding is sought under The NextGenerationEU Funding initiative and the Government is optimistic it will be approved by the European Council.


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