Ireland to Spend Half of 2021 Budget to Fight Pandemic and its Aftermath
Ireland will spend almost half of the € 17.8 billion in the 2021 budget plan to fight the coronavirus and its socio-economic impact. The national budget was officially presented on Tuesday by the country’s finance minister, Paschal Donohoe.
“Ireland has faced many difficulties since independence, but there has never been anything like the COVID-19 pandemic,” the finance minister said. “We live in a time of uncertainty and mounting risks,” he continued. “Meeting these challenges for all Irish citizens is the primary responsibility of the government.”
Donohoe pointed out that the size of next year’s budget will be « unprecedented in the history of the country » and will have an « obvious social orientation. »
The plan implies creation of an economic recovery fund in the amount of €3.4 billion, which, in addition to the costs associated with the pandemic, will also be used to support local businesses suffering as a result of the UK’s exit from the European Union (a transitional period when the rules of mutual trade remained quo, expires December 31).
The budget also includes a grant scheme to support small and medium-sized businesses: companies that have lost more than 80% of their income as a result of quarantine will receive assistance in the amount of €5 thousand per week. The tourism and hospitality sectors, which are most affected by the quarantine, will be granted tax holidays next year, for which the income tax will be reduced from 13.5% to 9%.
Health care spending is planned to be increased by €4 billion. €500 million will be allocated for the construction of social housing. It is also planned to implement a scheme under which any citizen who buys his first apartment will be able to receive a discount of 10% of its market value. The government decided to abandon the previously planned increase in the retirement age to 67 years.
About a fifth of Ireland’s budget will come from external borrowing. The deficit at the end of the year, according to the government’s plans, will amount to €20.5 billion, while the expected GDP growth will be 1.75%.