Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

Ministers confident of financial 'firepower' to withstand Covid-19 in 2021 despite €19 billion deficit last year

The deficit is compared to a pre-pandemic predicted surplus for the year of €2.5 billion.

THE GOVERNMENT HAS said it has the “firepower” to support the economy throughout 2021 despite the Department of Finance reporting an overall deficit of €19 billion for 2020.

The deficit is compared to a pre-pandemic predicted surplus for the year of €2.5 billion and is largely due to the government’s spending on Covid-19 supports.

Overall government spending last year increased by €13.7 billion, or 25%, with health and social protection the biggest areas of expenditure.

Tax revenues overall were down by €2.1 billion, or 3.6%, on 2019. 

VAT receipts were down by 18% on 2019 as public health restrictions impacted consumer spending with corporation tax the only major tax to record an increase. 

Finance Minister Paschal Donohoe said however that the rate of increase in corporate taxes would “begin to decline” throughout this year. 

The government had previously outlined that its budgetary plans would be based on the assumption of no deal Brexit and Donohoe said today that the Brexit deal would help with financial planning. 

“If you look at where we are overall, we have avoided the worst challenges in relation to Brexit, so that is a very important improvement on the outlook for the year,” he said.

It’s clear of course that we continue to have really great challenges in dealing with the disease but if you look at the two funds in their entirety, and if you look at how we’ve been able to support the economy in 2020, I do believe that initiatives that we announced on budget day will be sufficient to support the economy through to recovery in 2021. 

Minister for Public Expenditure and Reform Michael McGrath said there are sufficient financial resources available for this year. 

“If you look at the amount of we have actually allocated to departments, through the votes in terms of Covid, it’s of the order of €6.5 billion and then when you add the contingency fund of €2 billion and recovery fund of €3.4 billion there is provision there as such for exceptional type spending of the order of €12 billion.”

“I would agree with Minister Donohoe that we believe at this point that the envelope we have provided gives us the firepower to support the economy over the course of 2021.”

Speaking to reporters, the ministers also said the current PUP rates and the wage subsidy scheme won’t change in the near term and that a review would not take place until the current Level 5 restrictions are eased. 

Readers like you are keeping these stories free for everyone...
A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

Close
25 Comments
This is YOUR comments community. Stay civil, stay constructive, stay on topic. Please familiarise yourself with our comments policy here before taking part.
Leave a Comment
    Install the app to use these features.
    Mute Tommy Berry
    Favourite Tommy Berry
    Report
    Jan 5th 2021, 4:49 PM

    They must have found that magic money tree, they accused the Shinners of having.

    346
    Install the app to use these features.
    Mute David Corrigan
    Favourite David Corrigan
    Report
    Jan 5th 2021, 4:56 PM

    @Tommy Berry: It’s either that or they rehired the leprechaun.

    118
    Install the app to use these features.
    Mute Martin Scaldbag
    Favourite Martin Scaldbag
    Report
    Jan 5th 2021, 5:00 PM

    @David Corrigan: F.F. Have plenty experience of how to run an country’s coffers dry. They don’t know what a balanced budget is.

    144
    See 3 more replies ▾
    Install the app to use these features.
    Mute EFitz66
    Favourite EFitz66
    Report
    Jan 5th 2021, 5:28 PM

    @Tommy Berry: No we have the lowest bond yields ever because of prudent financial management over the last 10 years.Today the Ntma sold 4 billion 10 year bonds at -.27% interest So that means we get paid 1.1 million a year from them to mind their money. In 2010 we were heading towards 14% and being refused money everywhere

    57
    Install the app to use these features.
    Mute Ciaran O'Mara
    Favourite Ciaran O'Mara
    Report
    Jan 5th 2021, 6:16 PM

    @Tommy Berry: In 1833 the British government borrowed £20 million on the bond market to pay slaveholders compensation when slavery was abolished that year. In 2015, David Cameron finally paid off the descendants of those bondholders. That’s what governments do.
    We can borrow, as we did today, at negative rates and we are being encouraged to do by the ECB as is the rest of the EU. It may be centuries if ever before these loans have to be repaid.

    35
    Install the app to use these features.
    Mute james foley
    Favourite james foley
    Report
    Jan 5th 2021, 10:29 PM

    @Tommy Berry: it’s called borrowing at low interest rates most probably helped by not defaulting on our previous bailouts

    5
    Install the app to use these features.
    Mute Eddie Michael
    Favourite Eddie Michael
    Report
    Jan 5th 2021, 4:59 PM

    That’s what that really expensive printer is for.
    Just keep printing…

    126
    Install the app to use these features.
    Mute Carol Cunningham
    Favourite Carol Cunningham
    Report
    Jan 5th 2021, 6:23 PM

    @Eddie Michael: and how come they could have all those families in emergency accommodation because they did not have the money to house them?

    45
    Install the app to use these features.
    Mute Sean Reddin
    Favourite Sean Reddin
    Report
    Jan 5th 2021, 4:54 PM

    Must be using Michael Noonan’s bung money!

    94
    Install the app to use these features.
    Mute Mattress Dick
    Favourite Mattress Dick
    Report
    Jan 5th 2021, 5:05 PM

    @Sean Reddin: they checked down the back of Ray Burke’s couch

    78
    Install the app to use these features.
    Mute David Connell
    Favourite David Connell
    Report
    Jan 5th 2021, 5:33 PM

    Get the banks to bail us out…….Its their turn now.

    97
    Install the app to use these features.
    Mute G.
    Favourite G.
    Report
    Jan 5th 2021, 5:07 PM

    Amazing what can be done by central banks when they put their minds to it.

    82
    Install the app to use these features.
    Mute Pat Murphy
    Favourite Pat Murphy
    Report
    Jan 5th 2021, 4:59 PM

    Sure the working class not better bunch to pay it back

    73
    Install the app to use these features.
    Mute WW
    Favourite WW
    Report
    Jan 5th 2021, 6:23 PM

    @Pat Murphy: damn sure it won’t be the elite of our wonderful country.

    35
    Install the app to use these features.
    Mute Shay Redmond.
    Favourite Shay Redmond.
    Report
    Jan 5th 2021, 6:16 PM

    I hate it when they say a Minister is confident. That’s usually when the trouble starts..

    56
    Install the app to use these features.
    Mute longstrides
    Favourite longstrides
    Report
    Jan 5th 2021, 4:56 PM

    November all we heard was vaccine on the way, vaccine on the way, vaccine on the way.
    Well, keep paying the PUP and business supports now and roll out the vaccines and we all get our lives back.

    35
    Install the app to use these features.
    Mute ed w
    Favourite ed w
    Report
    Jan 5th 2021, 4:59 PM

    @longstrides: if you think that is what this “vaccine” will do . you’re in for a long wait

    52
    Install the app to use these features.
    Mute Vanessa
    Favourite Vanessa
    Report
    Jan 5th 2021, 5:17 PM

    @ed w: I take the bait. What will this “vaccine” do?

    18
    See 3 more replies ▾
    Install the app to use these features.
    Mute Brian Ó Dálaigh
    Favourite Brian Ó Dálaigh
    Report
    Jan 5th 2021, 5:32 PM

    @Vanessa: on its own, not much. But, in combination with 5G Bill Gates will be able to play you like a PS5. That’s what the new third hand is for – an antenna for the 5G for superior gameplay.

    22
    Install the app to use these features.
    Mute Vanessa
    Favourite Vanessa
    Report
    Jan 5th 2021, 5:35 PM

    @Brian Ó Dálaigh: Probably is some of those bad Dr Who plots they do recently.

    6
    Install the app to use these features.
    Mute Tom kenny
    Favourite Tom kenny
    Report
    Jan 5th 2021, 6:17 PM

    @Brian Ó Dálaigh: wrong, the extra hand is for working in the gulags which will be in leatrim, so I have heard

    9
    Install the app to use these features.
    Mute Garry Coll
    Favourite Garry Coll
    Report
    Jan 5th 2021, 6:15 PM

    In the budget the government said that the cost of Covid for the country was 16.5 billion from March to October.
    Eight months or thereabouts.
    In the budget it projected that the cost of Covid on the country for the year to October 2021 would be 8.5 billion.
    About half of what it cost for the eight months from March to October gone past.
    All of which suggests that the government expects the pandemic to last for four months from November 2020.
    Which would be February 2021.
    Not long to go now thank God.

    9
    Install the app to use these features.
    Mute Philip Martin
    Favourite Philip Martin
    Report
    Jan 5th 2021, 7:13 PM

    Now, why didn’t you take the Apple off the tree when you and the other twits had your chance.

    8
    Install the app to use these features.
    Mute Fred Conlan
    Favourite Fred Conlan
    Report
    Jan 5th 2021, 11:07 PM

    Really? Can you believe these charlatans, we will pay for this like the bank bailout, a Covid 19 charge.

    4
    Install the app to use these features.
    Mute Dick Durkin
    Favourite Dick Durkin
    Report
    Jan 5th 2021, 9:19 PM

    All the views on the story below yet this one and it’s ongoing ramifications will be the biggest killer

    1
Submit a report
Please help us understand how this comment violates our community guidelines.
Thank you for the feedback
Your feedback has been sent to our team for review.

Leave a commentcancel

 
JournalTv
News in 60 seconds