Donohoe insists ‘no cliff-edge’ cuts as Dáil approves extension of supports

Vaccination programme will be ‘touchstone’ for economic recovery, says Minister

Minister for Finance Paschal Donohoe: said reopening will be costly and will pose new challenges that will need to be sustained by supports and corrective measures. Photograph: Alan Betson

Ireland’s vaccination programme will be the “touchstone” for economic recovery but will take time and there will be no “cliff-edge” cut in supports for businesses and employees in the interim, the Minister for Finance has pledged.

Amid increasing concerns about a period of retrenchment post Covid-19 pandemic, Paschal Donohoe told the Dáil: "We will put in place supports to continue for as long as they are needed to ensure the beginnings and the taking hold of the strong recovery we all know is needed."

He said that as society opens up “we can and should expect an initial rebound, in part fuelled by pent-up demand, but this is not the same as a full recovery”.

Reopening will be costly and will pose new challenges that will need to be sustained by supports and corrective measures “to allow us get the balance right between supporting the recovery and the cost to the taxpayer”.


He stressed that “in recognition of the challenges facing so many businesses I want to reiterate today that there will be no cliff-edge in the removal of support”.

Mr Donohoe was speaking as he moved a Dáil motion to extend the employment wage subsidy scheme (EWSS) and the Covid Restrictions Support Scheme (CRSS) until June 30th, the second time the schemes have been extended.

Outlining the expenditure on a range of support schemes, Mr Donohoe said supports for businesses from his department alone had reached €9 billion while the Department of Social Protection had paid €6.5 billion through the pandemic unemployment payment (PUP).

The temporary wage support scheme, the forerunner to the EWSS, cost almost €3 billion, while the EWSS “has cost €2.8 billion with almost half a billion in PRSI forgone”.

The Minister said the cost of the CRSS is approaching €500 million, with the extension of the scheme expected to cost €240 million, and €2.3 billion of tax debt has been warehoused.

A total of 22,100 businesses have registered 25,900 premises for the CRSS with Revenue to date. Some 148,400 claims for CRSS payments of €478.9 million in respect of 24,600 premises have been made with €475.5 million processed for payment.

Mr Donohoe said 48,900 employers have currently registered with Revenue for the EWSS and more than half a million employees have benefited.

“A total of €2.8 billion has been paid and, as of last week, there were more than 420,000 people in receipt of the PUP,” he said. “In the medium term, the speed at which the economy can recover depends uniquely on our vaccination programme.”

The relationship between economic activity and public health restrictions “has weakened with every wave” he said.

Last month’s VAT returns were up 8.5 per cent on the first quarter and consumers are buying local and buying online.

Sinn Féin enterprise spokeswoman Louise O’Reilly said people availing of the schemes “speak incredibly highly of them and are incredibly grateful for the assistance”. But she said many businesses were still excluded.

Sinn Féin’s public expenditure and reform spokeswoman Mairéad Farrell said businesses without a fixed premises are not able to qualify and the scheme is targeted rather than prescriptive “but only those businesses with fixed premises that can show reduced footfall as a result of the restrictions will qualify”.

Labour finance spokesman Ged Nash said that while there will be no cliff edge "not all businesses will come through this period unscathed".

He said efforts must be made “to establish a series of supports that will provide what I might call a set of stabilisers for businesses that can be viable again, but which will need customised and tailored supports over the next period of time to help them through the early phase of what we hope will be a successful economic and social recovery”.

Marie O'Halloran

Marie O'Halloran

Marie O'Halloran is Parliamentary Correspondent of The Irish Times