Stimulus package has more than 50 measures to boost economy

Stimulus package has more than 50 measures to boost economy
(Left to right) Leo Varadkar and Taoiseach Micheál Martin. The government says it is difficult to put a figure on the levels that might get back to work. Photo: Julien Behal Photography/PA

The Government's €7bn stimulus package includes over 50 measures designed to give a giant fiscal injection into the economy which will not only protect existing jobs but pave the way for new ones.

While tax savings, training schemes and special grants form part of the plan, a large part of it is geared towards continuing emergency Covid-19 pandemic payments until April next year.

A surprise element that wasn't expected is potentially reduced costs for everyday goods across the board, with the decision to cut the standard rate of VAT from 23% to 21%, at a cost of €440m.

This is seen as a key way of getting people to spend, particularly the estimated two million people whose pay has not been impacted by the pandemic and who, instead, have been saving. That was what Tánaiste and Business Minister Leo Varadkar said at the plan's launch.

There was criticism though that the hospitality VAT rate was not reduced from 13% downwards instead, as it is one of the worst affected sectors.

There are also some more niche supports in the plan, with the announcement to boost the help-to-buy scheme for first-time buyers by €10,000 to €30,000 while schools, greenways, a Brexit fund and refurbishment funds are also on the table.

Overall, there will be €500m towards capital plans and construction, including retrofitting schemes and funds for schools, sports centres and the arts who all must adapt in the pandemic. Greenways and cycling routes will also benefit from this.

Several schemes will enable reskilling, training and give employers cash payments for hiring.

Mr Varadkar said between the €200m allocated for training incentives and third-level schemes, up to 75,0000 people will get placements under job activation courses.

This will include heavy goods driver and health and safety courses, giving payments of up to €1,000 per person. Elsewhere, employers will get paid for taking people on, with amounts up to €10,000. Some €100m will go to the third level sector, including for apprenticeship places.

The government says it is difficult to put a figure on the levels that might get back to work. But in recent weeks, the 600,000 who were dependent on the wage subsidy scheme has reduced to 400,000. This will continue, albeit under a different name, until April next year, with hopes that more and more companies can let go of that crutch and move away from it.

Equally, while the pandemic unemployment payment will be extended, it will be scaled down. At the peak of the crisis, almost 600,000 people were claiming this. But with the economy gradually reopening, this figure has fallen to just over 300,000.

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