Finance Minister Paschal Donohoe should set up a €1bn fund to mitigate the damage a crash-out Brexit will inflict on Irish-owned agri-food, haulage, and small firms, a leading business group has urged.
In its submission ahead of October’s budget, the British Irish Chamber of Commerce said Mr Donohoe’s tax and spending measures are shaping up to be “one of the most consequential budgets in the history of the State”.
The business group has rowed in behind the Central Bank and the Irish Fiscal Advisory Council in warning the finance minister against overly relying on corporate tax receipt bounties.
But it argues its proposed €1bn for Brexit-vulnerable firms could be part-funded from the windfall company taxes.
The group also wants the EU to help the Government fight back against Brexit by allowing it to circumvent, for a while at least, state-aid rules designed to prevent countries from favouring their own national firms.
And it wants a so-called Brexit Mitigation Fund to be set up to help other countries across the union which will be hit by Brexit.
It also called on the Government here to encourage universities to start thinking on an all-Ireland basis by setting up what it calls a “North-South Academic Corridor” to promote research projects, and proposed “an innovation district” for Dublin “to enhance Ireland’s reputation as a top-tier location for investment”.
The chamber said that companies desperately need reassuring that they will be helped, as the Halloween deadline set by UK Prime Minister Boris Johnson for Britain to be out of the EU draws closer.
Emphasising the importance of British-Irish trade, it cites official figures showing that Irish goods exports to the UK amounted to over €16bn, while €26.3bn in services exports also went across the Irish Sea. It said:
To reassure Irish businesses and to offer immediate confidence to the Irish economy, the chamber is calling for the Irish Government to establish a €1bn Brexit Response Fund. Budget 2020 will be one of the most consequential budgets in the history of the State.
“Ireland is facing the real and growing prospect of a no-deal Brexit outcome that will place untold obstructions on UK-Ireland trade. At this critical time, we have to balance short-term uncertainty with long-term imperatives,” its director-general, John McGrane, said.
Separately, the Irish Congress of Trade Unions (Ictu) said in its pre-budget submission that the Government should spend €160m of its costed €2.9bn in spending proposals on assistance in case of a British crash-out.
Its single largest spending proposal is for an €830m fund in year one to build affordable housing, and €600m to help make Sláintecare a success.
Among its €970m in tax revenue proposals, Ictu wants tax increases on people earning more than €100,000 to bring in an additional €225m, and a separate “net wealth tax” to raise an estimated €375m.
“Ireland has a number of emerging challenges as we approach a new decade — these include Brexit; climate chaos; precarious work and inequality; housing and homelessness emergencies; a two-tier health system; the fiscal implications of a growing and ageing population, and the fragility of an industrial strategy based on tax-sensitive US multinationals,” it said.