Young to benefit from jobs stimulus, Vat threshold set to rise and virus wage schemes extended

Taking more businesses out of the Vat net, reducing taxes for the tourism sector, lowering commercial rates, and extending wage subsidies further are all expected to be included in the Government’s jobs stimulus package to be unveiled next month.
Young to benefit from jobs stimulus, Vat threshold set to rise and virus wage schemes extended
Taoiseach Micheál Martin wants 'shovel-ready' solutions to the jobs crisis.
Taoiseach Micheál Martin wants 'shovel-ready' solutions to the jobs crisis.

Taking more businesses out of the Vat net, reducing taxes for the tourism sector, lowering commercial rates, and extending wage subsidies further are all expected to be included in the Government’s jobs stimulus package to be unveiled next month.

Taoiseach Micheál Martin said the “sizeable package” next month would also focus on young people-worst impacted by the pandemic- to get them back to work.

The Coalition is worried that 900,000 people are still reliant on emergency pandemic payments, despite the construction and retail sectors reopening.

Mr Martin and ministers want quick solutions for the jobs plan, including turning to “shovel-ready” projects. A multibillion-euro fund will back the plan.

The Irish Examiner understands the July jobs stimulus plan being assessed includes:

  • Raising the Vat threshold for employers. Currently, businesses with annual turnovers over €37,500 providing services or €75,000 for goods must register for Vat;
  • Assessing the future of the pandemic unemployment payment. The wage subsidy scheme is also likely to be extended beyond August;
  • Easing credit lines, enacting legislation for the €2bn credit guarantee scheme, Sure scheme, and the warehousing of tax liabilities;
  • Commencing a high-level review of the economy to identify sectors with the greatest opportunity to grow and sustain quality jobs;
  • Establishing sectoral taskforces, with experts, stakeholders, and chaired by line ministers, to focus on needs of sectors and to produce plans for the National Economic Plan;
  • Scaling up Microfinance Ireland so it can support greater numbers and review the Business Restart Grant and consider further supports for SMEs;
  • Launching a multibillion-euro recovery fund which will include infrastructure development, reskilling plans, and support investment.

The jobs plan will come ahead of a national economic plan to be launched in October, which will charter a more long-term recovery for the country.

Tánaiste Leo Varadkar said the July plan came on the back of worrying figures still in receipt of the Covid-19-related payments, despite the lifting of Covid-19 restrictions yesterday and in recent weeks.

“It is a matter of real concern to the government that there are still 900,000 people either on the unemployment payment or the wage subsidy scheme. Even though construction is back six weeks and retail is back three weeks, there are 900,000 people who are dependent on state support for their income and who were not in February.”

Both the Fine Gael and Fianna Fail leaders said youth unemployment was a particular concern.

Mr Martin signalled that his preference for the July plan was for solutions that work quickly. “Some of the measures of taxation may have more medium or longer term than” short solutions required, he said.

SMEs, the hospitality sector, the arts community, and others will today plead for robust supports to recover from the pandemic.

John Moran, chairman of an SME recovery fund, will tell the Oireachtas Covid-19 committee the sector needs a €15bn bailout.

The Restaurant Association of Ireland will reiterate concern about the “unviable 13.5% Vat rate” its 3,000 members must pay, while the Irish Hotels Federation wants this rate reduced to 5% until December 2021, with both groups warning thousands of jobs are set to be lost unless changes are agreed.

Meanwhile, Mr Martin has echoed concerns about banks banning lending to those on the wage subsidy scheme. It follows AIB introducing restrictions on mortgage lending.

Public Expenditure Minister Micheal McGrath said he was unhappy with this.

Mr Martin agreed, adding: “That is something we are going to have to examine... I’d agree with the minister on that. I wouldn’t be entirely happy with that approach. We will be examining the operation of the wage subsidy scheme more generally.”

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