Budget 2021: What we know so far

Michael Mc Grath, Minister for Public Expenditure and Reform putting the finishing touches to budget 2021 at department offices in Dublin. Photograph: Moya Nolan

Budget 2021 will focus on housing, health, Brexit, and climate action as the country prepares to run a €14.5bn deficit.

Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath will commend their Budget to the house at lunchtime on Tuesday, with major spending aimed at kickstarting the economy and beefing up the health service the likely headlines.

However, there will be announcements for every sector of society.

Economy

A massive investment in Ireland's recovery has been earmarked as a method to kickstart the Irish economy. Designed to safeguard against a hard Brexit as well as mitigate the worst effects of the pandemic, the fund could be as large as €5bn, with sources saying it will be "at least €3bn".

The fund is aimed to provide an additional stimulus to the economy against the dual threats, specifically aimed at businesses that have been affected by the pandemic and who may be affected in a hard Brexit scenario.

Finance Minister Paschal Donohoe has already ruled out any rises in income taxes, though it is highly unlikely that any cuts will be announced.

Businesses should also see the establishment of a compensation fund. This would help businesses which have been forced to close due to Covid restrictions stay afloat. This fund will offer cash payments on a weekly or monthly basis to assist businesses.

The commercial rates waiver, which was in place for quarters 2 and 3 this year, is likely to be extended into 2021.

Health

In health, Minister Stephen Donnelly is set to be given the largest increase in health spending ever, with an additional €3.5bn earmarked as the nation's health service responds to the Covid crisis and attempts to re-establish normal levels of service.

Around €1.5bn will be allocated to providing new beds and staff, including keeping open 800 beds which were brought on stream during the first wave of the pandemic as well as the 500 provided for in the winter plan.

There will also money for new ICU beds, as well as thousands of new staff and a €1.3bn investment in testing and tracing as part of the Covid-19 response.

Meanwhile, the number of hours allocated as part of home-care packages is to increase by five million, up to 24 million hours. The Government is keen to keep older and more vulnerable people out of hospitals over the winter.

The cost of 20 cigarettes will go up by as much as 50 cent.

Social Welfare

The core rates of social welfare are due to be protected in the announcement, though it is unlikely that there will any increases for the pension or jobseekers.

It is also unlikely that the Pandemic Unemployment Payment (PUP) will be restored to the €350 rate. It will, however, be altered to allow the self-employed to earn €480 a month through their work, while still claiming the payment, as well as three weeks paid parental leave on top of the existing two weeks.

A Christmas bonus for 400,000 people in receipt of the PUP and jobseeker's payment is also expected to be included in the budget announcement. That measure, Mr McGrath said last week, will cost around €400m but is seen as vital to boost a flagging retail sector in the run up to Christmas.

Specific supports will be made available to taxi drivers, who have found their business devastated by the pandemic.

Housing

In housing, we are likely to see the continuation of the Help-to-Buy scheme, a new affordable housing plan and significant investment to fund directly-built homes.

The announcement will see an additional €700m set aside for the building and retrofitting of social and affordable homes. The Government is desperate to kick-start the industry, where house completions could hit as low as 14,000 this year.

A considerable chunk of the extra allocation will be given to approved housing bodies and local authorities who have been ordered to build directly more homes. The remainder will be spent on an affordable housing scheme - the details of which will be known in the coming weeks - homeless services, and other initiatives aimed at providing more homes.

Around €300m will be spent in repairing older homes.

Environment

The carbon tax will be raised by €7.50 per tonne and spending on greenways will rise to €50m, doubling the previous investment.

Education

Education will see a 5% increase in its core spend, which will translate to 2,000 new posts.

This figure will include around 990 extra special-needs assistants (SNAs) along with 400 more special-education teachers and approximately 600 mainstream teachers across primary and secondary schools across the country.

The arts and hospitality

There is expected to be a number of measures announced for the arts sector, which has found itself decimated by the pandemic.

Grants of up to €10,000 for music and theatre venues will be included in the budget in a programme described as a “lifeline for the industry”.

“The package will be available for the likes of (live music pubs) Whelan’s, Coughlan’s, the Róisín Dubh and the Gleneagle, from schools and colleges who want to put on a show, wedding bands, drama groups and up to the 3 Arena,” a government source said.

The amount of funding granted will be based on criteria such as how many staff the venue or company employ and the track record it has in live music or performance.

The hospitality industry is also expected to get a welcome reprieve with a cut in the Vat rate from 13.5% to 9%.