‘Brexit-proofing’ budget measures being considered, says Enda Kenny

Financial supports and special access to credit to Brexit-hit businesses are being examined as part of final preparations for the budget, Taoiseach Enda Kenny said.

The confirmation came as the Taoiseach was called on to improve the capital gains tax regime for entrepreneurs, to invest in infrastructure in the border region, and to reduce costs for businesses facing inevitable head winds from Britain’s planned EU withdrawal.

In the Dáil, Fianna Fáil finance spokesman Michael McGrath told Mr Kenny that the fall in sterling had already hit the economy here, since the Brexit referendum in June.

“Irish businesses exporting to the UK, their goods and services have, in relative terms, become 14% more expensive,” said Mr McGrath.

“Many analysts predict that sterling will fall further, with some even predicting it will reach parity with the euro in the next year or so.

“This already has cost jobs and will cost many more in the period ahead if this trend continues.

“On top of that, inbound tourism from the UK is inevitably going to be affected because it is more expensive.”

The Government has agreed to begin an all-island forum on Brexit next month and to intensify communications with London and member states, following British prime minister Theresa May’s setting out of how and when Brexit will proceed.

European Commission chief Brexit negotiator Michel Barnie is also set to visit Dublin next week.

Mr McGrath said that, as part of the budget, Fianna Fáil wanted to see the 9% special Vat rate for tourism and hospitality kept in place.

Michael McGrath

An improved capital gains tax regime for entrepreneurs and a real focus by Enterprise Ireland and other agencies on supporting exporting firms was needed, added the Cork South Central TD.

More investment was also necessary in infrastructure in the border region to make Ireland more competitive, Mr Kenny was told.

The Department of Finance this week reduced its growth predictions for the economy as did the IMF because of the impacts of Brexit.

Other initiatives to Brexit-proof businesses should be considered for the budget, said Mr McGrath.

“There must be a renewed focus on reducing costs — costs that the State can influence, be they insurance, transport or energy costs — to make us more competitive and to deal with the inevitable headwinds that Brexit proposes.”

Mr Kenny said departments and the strategic bank were looking at options that might be open in terms of “financial supports or access to credit for businesses that are now suffering because of the decline in the strength of sterling”.

He added: “This is a matter of urgency and I hope that the budget will have a number of what we might call ‘Brexit-proofing’ measures in respect of the issues raised by the deputy.