Irish firms await stimulus at 'eleventh hour' in Covid-19 crisis    

Irish firms await stimulus at 'eleventh hour' in Covid-19 crisis    
ISME Chief Executive Officer, Neil McDonnell enters the Dáil to report to the Oireachtas Special Committee on Covid-19 economic response. Picture: Sasko Lazarov / RollingNews.ie

A cut in Vat and a revised wage-support scheme would be among the most effective measures in the Government's stimulus package to help businesses in their "eleventh-hour" fight to survive during the Covid-19 economic crisis, advisers and business groups have said.   

Government ministers are expected to unveil the long-awaited stimulus package early next week. 

It comes as figures published this week showed that 980,900 people -- or around half of all private-sector workers -- still rely on some sort of government payment to make ends meet despite the opening up of many parts of the economy from full lockdowns.

The number includes 415,000 people on the wage-support scheme, which has surpassed the pandemic unemployment payment as the largest of the two main welfare payments during the crisis.                                                                      

KPMG accountants said the Government has committed to extend the wage-support scheme but that many companies coming off the scheme have yet to get back to full financial health.                                                     

Keeping PRSI reliefs for employers and employees available under the wage-support scheme for people moving off the scheme would reduce "the potential cost of further job losses”, said KPMG head of tax Tom Woods, while a Vat rate cut would help companies return to profitability. 

Neil McDonnell, head of business group Isme, said the stimulus package comes at the  "eleventh hour" for many small businesses.

"Grants and not loans will be needed because debt is going to get businesses no-where," Mr McDonnell said, referring to the measures that Isme wants from the stimulus package. 

      

The credit-guarantee scheme announced earlier this week by the new Business Minister Leo Varadkar was not designed for small firms, he said.     

Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar is championing a €2bn Covid-19 Credit Guarantee Scheme for businesses impacted by the coronavirus pandemic. Picture: Brian Lawless/PA Wire
Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar is championing a €2bn Covid-19 Credit Guarantee Scheme for businesses impacted by the coronavirus pandemic. Picture: Brian Lawless/PA Wire

"Much has been pinned on the EU agreeing to implement some kind of recovery fund, but the perennial arguments that are such a feature of these summits are still to be resolved," said Chris Beauchamp, chief market analyst at online broker IG. 

Dutch opposition and a threat of a Hungarian veto weigh on the chances for a deal on the EU’s 2021-2027 budget, envisaged at slightly above €1 trillion, and an attached new recovery fund worth €750bn. 

The 27 EU heads gathered in a room in the Brussels EU headquarters equipped with hand sanitisers and disinfected headsets. Unusually, as a health precaution, there were no journalists in the building.

 

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