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Record investment to address public ‘concerns’ in Ireland’s Budget 2021

The Finance Minister said he understood the ‘air of uncertainty’ in the country thanks to Covid-19.

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Finance Minister Paschal Donohoe (Brian Lawless/PA)

Finance Minister Paschal Donohoe (Brian Lawless/PA)

Finance Minister Paschal Donohoe (Brian Lawless/PA)

Ireland’s budget aims to address the public’s “concerns and anxiety” for the future, the country’s Finance Minister said.

Paschal Donohoe said he understood the “air of uncertainty” that pervaded due to Covid-19, despite the Government’s efforts to beat this “terrible disease,” and that he hoped to address those uncertainties in today’s Budget.

Mr Donohoe will announce next year’s budget at a sitting of Dail Eireann at the convention centre in Dublin along with Public Expenditure Minister Michael McGrath.

Ireland’s health service is set for an unprecedented level of investment when budget 2021 is announced later.

Speaking ahead of a Cabinet meeting at Dublin Castle, Mr Donohoe said: “What we have done today is put together a Budget that aims to respond back to that uncertainty.

“It aims to recognise where we are, and by drawing upon the strengths that our economy has and the qualities that our society has, (it has) created a really important and strong framework for our country for the rest of 2020 and for 2021.

“It’s about how we protect lives. It’s also about how we put the resources in place to protect and to secure livelihoods. And that’s what this Budget is about today.”

The budget has been prepared in the shadow of the coronavirus pandemic and the expectation that a no-deal Brexit will take place in 2021.

Despite these challenges, Mr Donohoe said he believed the state’s finances are strong enough to respond and “help us look forward to a better day”.

This year Ireland’s health budget was estimated at a record-breaking 20.3 billion euro – with an increase of four billion euro being mooted for next year.

The Public Expenditure Minister said the Government will be providing a “record level” of public expenditure investment and support in the budget.

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Mr Donohoe acknowledged anxieties over Covid-19 as well as the expectation of a no-deal Brexit in 2021 (Niall Carson/PA)

Mr Donohoe acknowledged anxieties over Covid-19 as well as the expectation of a no-deal Brexit in 2021 (Niall Carson/PA)

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Mr Donohoe acknowledged anxieties over Covid-19 as well as the expectation of a no-deal Brexit in 2021 (Niall Carson/PA)

Mr McGrath described it as a “very significant day” and that he and the Finance Minister wanted to give “hope” and “confidence” to the Irish people that the country “will come through this really difficult period”.

“We hope that that will help to sustain a high level of social solidarity across this period,” he said.

The Fianna Fail TD added that he hoped that people would see that the Government has “done its best in really extraordinary circumstances”.

The health minister said the document included a very large investment in community-based care, which he said was something which was core to universal care and moving to a “more modern healthcare system”.

Stephen Donnelly said it was also about access to care.

“We are going to build the permanent capacity right across the system,” Mr Donnelly said.

“We’re very cognisant that there are far too many people waiting for care.”

Ireland’s premier Micheal Martin also signalled a record increase as the country continues to battle Covid-19.

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Taoiseach Micheal Martin has promised an ‘unprecedented level of resources’ for the Irish health service (Julien Behal/PA)

Taoiseach Micheal Martin has promised an ‘unprecedented level of resources’ for the Irish health service (Julien Behal/PA)

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Taoiseach Micheal Martin has promised an ‘unprecedented level of resources’ for the Irish health service (Julien Behal/PA)

Speaking on Friday, he said: “An unprecedented level of resources have been allocated to the health services, both in the winter plan and throughout the entirety of 2021.”

Mr Donohoe has said Ireland faces a pre-budget deficit of 21 billion euro – although this is lower than the 30 billion euro deficit predicted earlier this year.

“This would be the equivalent of approximately 6% of national income,” Mr Donohoe said last week.

“For next year we anticipate a pre-budget deficit of 14.5 billion euro if there were no policy changes, this is the equivalent of just over 4% of GDP.”

Mr Donohoe emphasised these figures were subject to “an unprecedented degree of uncertainty with potential further change within 2020 and clearly the potential for significant change in 2021”.

But he has consistently ruled out the prospect of income tax hikes in 2021.

He said recently: “Our personal tax receipts are holding up quite well, and in terms of what that says about our economy, it does indicate to me that momentum is building in our economy.”

But increases to the carbon tax are anticipated, with the programme for Government committing to increasing the levy  by 7.50 euro per tonne in every budget until 2029.

Last year’s budget increased the levy by six euro per tonne for 2020.

There were also discussions on Monday about extending the social welfare Christmas bonus to recipients of the pandemic unemployment payment (PUP).

A reduction of the VAT rate for the hospitality sector from 13.5% to 9% is also being considered.

Online Editors