More actions needed to support Irish businesses
Dublin, 8 October 2019: The Irish Exporters Association (IEA), the voice of the exporting industry in Ireland, welcomes today’s prudent Budget 2020 by Minister for Finance, Public Expenditure and Reform, Paschal Donohoe.
Commenting on today’s Budget 2020 announcement, Simon McKeever, Chief Executive of the Irish Exporters Association, said: “The Irish Exporters Association cautiously welcomes Minister Donohoe’s actions to prepare the Irish economy and business community for a potentially disastrous no-deal Brexit and the defining challenge of our time – Climate Change.
We particularly welcome the Government’s announcement to stand ready to provide significant financial supports for the Irish exporting industry. We welcome the Minister’s announcement that the Government will make available €1.2 billion (without EU funding) to tackle potential Brexit challenges, especially for vulnerable companies. In particular, we welcome the announcement that the Government will make available €650 million to support businesses in the agriculture, exporting and tourism sectors – including by encouraging further connectivity of Ireland’s rural ports and airports.
While we note the Government’s budgetary constraints, we are concerned that the announcement of €110 million for vulnerable, but viable, companies affected by a no-deal Brexit will not be enough. In this context, we are calling on the Minister for Finance and the Government to further clarify how today’s committed spending will be distributed between affected companies. There are serious concerns that a no-deal Brexit will lead to an immediate and accelerating deterioration in businesses’ credit profile and we are calling on the Government to clarify any measures to support and protect any such affected businesses. We have particular concerns about the small take up of the Brexit loan scheme to date, and more needs to be done to help companies understand, prepare for and mitigate the financial impact of a no-deal. The Irish Exporters Association thus calls on the Government to further engage in talks with the European Commission to investigate both national and EU-measures to support excessively affected businesses.
We particularly welcome Minister Donohoe’s announcement on increasing the R%D tax credit for Micro and Small businesses from 25% to 30%. Ireland is globally renowned as a centre of excellence for Research and Development, and today’s announcement will further underline Ireland’s attractiveness as an R&D destination. We are however disappointed that there will not be any adjustment to the Capital Gains Tax with an only limited increase in the Earned-Income Credit.
The Irish Exporters Association welcomes and supports the Government’s commitment to address the challenges of Climate Change and decarbonising the transport industry by 45-50% by 2030. While we welcome the additional funding to the Department of Transport, Tourism and Sport and the Department of Communications, Climate Action and Environment to transform our approach to transport, a specific and sustainable solution must be found for the heavy road freight industry and to support the development of a sustainable multimodal transport infrastructure. While we note the additional relief through the Diesel Rebate Scheme to hauliers to compensate for the increased cost of fuel, the Government missed a prime opportunity to put in place innovative support measures to diversify heavy road transport fuels through, for example, clarifying the duty rate of hydrogen as a transport fuel.