Covid and Brexit are the two big factors which have shaped today’s Budget.
The Finance Minister Pascal Donohoe said the budget is framed on the basis of no bilateral trade deal between the EU and the UK and the assumption that Covid-19 will still be here next year.
In his opening remarks, Minister Donohoe admitted Ireland has “never faced a situation like Covid-19 – an invisible enemy”.
He told the Dail: “We live in an era of great uncertainty and increasing risk. Overcoming these challenges in the interests of our fellow citizens is the central task of this Government.
“However, it is not enough that this Budget, which I present with Minister McGrath, surmounts the immediate threats we face, it must also advance efforts to make progress on the great priorities which our society continues to value.
“These are core missions for this Government: more homes, improved healthcare and a better national response to climate change.
“We have faced numerous difficulties since independence, but never one like Covid-19; an invisible enemy that has caused great suffering, and disrupted so much of what is central to our well-being.
“Equally, we meet this enemy with greater determination, resolve and resources than ever before in our history.
“This is due to the careful management of our economy when times were good, the support and solidarity of the European Union, and, more than anything, the hard work, dedication, and resilience of the Irish people.
“So, our message is clear.
“Yes, the test we face is daunting, further demanding choices await.
“Yes, the uncertainty and anxiety about the future of lives and livelihoods is great. And yes, we will prevail. We will come through this.
“And from the ashes of the pandemic, together, we will build a stronger, more resilient Ireland.
“Budget 2021 is a bridge to that better future.”
Minister Donohoe has announced a change to the VAT rate for the hospitality sector and a new payment scheme.
VAT for hospitality sector to be cut from 13.5 per cent to 9 per cent from November 1.
New scheme launched to provide targeted support for businesses to help those impacted or closed as a result of Covid-19 restrictions.
Scheme effective from today until March 31 2021.
Cigs are up!
Excise duty on a pack of 20 cigarettes to increase by 50 cent in Budget 2021.
According to the Minister, this will bring the price of cigarettes in their most popular price category to €14.
The Minister revealed that the Department of Finance is forecasting a loss of 320,000 jobs this year but said this will recover by around 155,000 by next year.
The unemployment rate is expected to decline slowly but could change depending on the path of the virus.
He said his department forecasts this year’s deficit to bring overall national debt to €219 billion or almost 108 per cent of national income.
A total of €8.5 billion will go towards public services to address challenges presented by Covid-19.
This package includes €2.1 billion in contingency funding.
Petrol and diesel on the rise
Carbon tax will be increased by €7.50 from €26 to €33.50 per tonne/Co2 to auto fuels from tonight and all other fuels from May 1 2021.
Petrol and diesel to cost more from midnight but does not apply to other fuels until next May.
VRT reliefs for Plug-in Hybrid Electric Vehicles and Hybrids will be allowed to expire.Relief for Battery Electric Vehicles will be tapered.Nitrogen oxide surcharge bands will be adjusted meaning higher nitrogen oxide emitting vehicles will pay more.
Motor tax rates remain unchanged for all cars in engine sized regime and all but the most pollutant cars in the post-2008 regime.
A third motor tax table for cars registered from next January 1 2021 will be opened to take account of the introduction of the WLTP emissions test.
A bit of Christmas cheer for some!
It was confirmed that the Christmas bonus will be paid to social welfare recipients this year.
Christmas bonus available to those who have been availing of social welfare payments for just four months – previously set at 15 months.
Most people receiving Pandemic Unemployment Payment will also receive Christmas bonus.
On December 7 most PUP recipients will get double payment.
Overall, a €510 million social welfare package has been introduced.
State Pension will remain at the age of 66 – rise of pension age to 67 on January 1 has been scrapped.
Weekly payment for qualified children will increase by €2 a week for kids under 12 and €5 a week for children over 12. This is payable to families in receipt of weekly social welfare payments.
Fuel allowance increased by €3.50 impacting 375,600 households.
Working Family Payment thresholds for families with up to three children increased by €10.
A total of €4Billion will be allocated towards the health service as it battles Covid-19 with the hopes to provide 100,000 Covid-19 tests a week.
A further €1.3 billion towards Covid testing and tracing and PPE supply where needed.
Covid-19 measures in place since March to continue into 2021.
1,146 more acute hospital beds.
100,000 additional inpatient and day care procedures to address waiting lists.
16,000 new jobs across the health sector,
€100 million towards disability measures.
Permanent adult critical care beds increased from 255 to 321 by end of 2021.
1,250 community beds including 600 new rehabilitation beds.
4 million additional homecare hours.
€5 million dedicated to development of community-based dementia services and supports.
€50 million towards new drugs and €25 million for Healthy Ireland and National Drugs Strategy.