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Commercial rates waiver and €10k restart grants: Government outlines supports to try help businesses recover

Businesses had been calling for supports to help them survive after the disruption caused by Covid-19.

LAST UPDATE | 2 May 2020

THE GOVERNMENT HAS agreed a series of measures at a special Cabinet meeting today to support small, medium and large businesses recover after the impact of Covid-19.

After the announcement of the phased reopening of the Irish economy, the government said today it “recognises that businesses require significant additional supports”. 

Businesses who were forced to cease trading and others affected adversely from Covid-19 had been calling on the government to provide supports to help them deal with the unprecedented crisis. 

The measures to support business announced today include:

  • A €10,000 “restart grant” for micro and small businesses based on a rates/waiver rebate from 2019.
  • A three-month commercial rates waiver for impacted businesses.
  • A €2 billion “Pandemic Stabilisation and Recovery Fund” within the Irish Strategic Investment Fund which will make capital available to medium and large enterprises on commercial terms.
  • A €2 billion credit guarantee scheme to support lending for SMEs for terms ranging from three months to six years that will be below market interest rates. 
  • The “warehousing” of tax liabilities for a period of twelve months after the recommencement of trading during which time there will be no debt enforcement action taken by Revenue and no interest charge accruing in respect of the warehouse debt. 

Speaking today, Minister for Finance Paschal Donohoe said that he appreciates “the massive economic and social challenges” for those out of work and said these measures today would help to rebuild “our jobs, our incomes and our economic health”. 

He added: “We believe these are significant measures that will make a difference to the retention of jobs, and the creation of new jobs.”

On the specific call from pubs, restaurants and tourism sectors to reduce the VAT rate on the hospitality industry, Minister Donohoe said a decision had not been taken on that measure yet as – according to the roadmap - it’ll be some time before they reopen. 

The measures will cost around €6.5 billion in all.

The government has also committed to local authorities to make up the shortfall on rates, so that these local authorities can still provide services to the public.

Minister for Business Heather Humphreys said: “We now have a comprehensive suite of supports for firms of all sizes, which includes grants, low-cost loans, write-off of commercial rates and deferred tax liabilities, all of which will help to improve cashflow amongst our SMEs.”

Humphreys said advice from Health and Safety Authority is available to those businesses looking to ensure they can enforce health guidelines when they go back to work.

SME credit supports

The credit guarantee scheme for SMEs will cost €2 billion. 

Under this scheme, it’ll provide an 80% guarantee on leding to SMEs until the end of this year, for terms between three months to six years. 

SMEs will be able to go directly to the banks in the Scheme, and the guarantee can be used for a wide range of lending products between €10,000 and €1 million.

The loans will have interest rates below current market rates, and the government said this is a “major component” of its strategy to support SMEs.

It will require legislation, and the drafting of this has already been approved. However, for legislation to pass, a new government must be formed as the Seanad cannot sit until the new Taoiseach nominates new members to the upper house.

Minister Donohoe acknowledged this was the case, and said a number of decisions had been made and would be made that would have to be ratified by the Dáil and the Seanad. 

Reaction

Business group IBEC said it welcomed the measures announced by government today.

Its CEO Danny McCoy said: “The scale of business collapse in recent weeks has been spectacular and unprecedented and the significant low interest loan guarantee; other liquidity and investment measures; grants; and tax deferral and waiver supports; are an important further step in addressing the cashflow crisis which so many businesses are dealing with.

These measures will support businesses through the worst of the economic collapse and help prepare many for reopening. They are an important component of an economic recovery plan and we will continue to work with Government on further initiatives.

Dublin Chamber and the Small Firms Association were among others who welcomed the measures.

However, the Family Business Network however said the measures are a “missed opportunity to maximise jobs and accelerate re-employment”.

Its executive director John McGrane said: “Neither more loans nor unworkable state equity investment are what businesses need to reopen and re-hire. What will get the recovery moving fastest is the extension of the Covid-19 Temporary Wage Supplement Scheme until a reasonable period after the State’s current restrictions on businesses are ended.”

Fianna Fáil’s Business spokesperson said while the measures unveiled today will provide some relief for businesses, they do not tackle the very urgent need to address the high interest rate being charged on government loans, business interruption insurance and rent payments.  

“I have been listening to and working with business owners since these restrictions were implemented and three of the main issues that came up time and again was access to low interest loans, insurance and rent.  And unfortunately, today’s government announcement does little to address any of these.

“Today’s measures do not address the high interest rate that the government is charging on its microfinance and loan guarantee schemes.  These offer rates of around 4%; despite the fact that government can borrow at rates of less than 0.25%.  Small and medium businesses are paying the price at a time when they cannot afford to,” he said. 

When put to the Minster Humphreys that some government loans in the UK have interest rates as low as 2.5% she said the full suite of measures on offer must be viewed together before comparisons can be made. She said they would continue to monitor the supports put forward by other countries. 

With reporting from Christina Finn

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    Mute Joe Price
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    Mar 15th 2021, 7:18 PM

    My pick this week….
    Cheltenham Tuesday,Wednesday,Thursday & Friday.

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    Mute Kenneth Hayden
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    Mar 15th 2021, 8:01 PM

    @Joe Price:
    Apart from Don’t Smoke in the Shower,any tips?

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    Mute Looney Tunes
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    Mar 15th 2021, 11:48 PM

    @Kenneth Hayden: ironing board, put your shirt on it

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    Mute Ciaran O 'Reilly
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    Mar 15th 2021, 6:35 PM

    Muck

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    Mute Paul Kossoff
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    Mar 15th 2021, 6:39 PM

    My viewing this week..Your Honor Season 1…Fargo Season 4.. Unforgotten Season 4 first 3 episodes..

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    Mute Gareth Miskelly
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    Mar 15th 2021, 6:53 PM

    @Paul Kossoff: new series of unforgotten is very good so far!

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    Mute d
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    Mar 15th 2021, 7:04 PM

    @Paul Kossoff: Don’t bother with Your Honour so predictable. Try Power or The Wire

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    Mute Paul Kossoff
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    Mar 15th 2021, 7:10 PM

    @d: thanks I’ve watched power last year and the amazing wire a long time ago..I watched the first episode of your honor last night and I think you maybe correct in your view..Fargo tonight …11 episodes so will keep me going for the coming nights.

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    Mute K
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    Mar 15th 2021, 7:35 PM

    @Paul Kossoff: Fargo is well worth your time. Excellent series.

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    Mute Ferg
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    Mar 15th 2021, 7:43 PM

    @Paul Kossoff: Fargo S4 has been excellent on TG4

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    Mute Alan Watts
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    Mar 15th 2021, 7:58 PM

    @Paul Kossoff: succession!

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    Mute Gary Mullins
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    Mar 15th 2021, 9:00 PM

    @Paul Kossoff: The Hannibal series is great too, Mads Mikkelsen is phenomenal as Lecter

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    Mute Karen Delaney
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    Mar 16th 2021, 8:27 AM

    @d: Watching Your Honor at the moment but not hugely impressed what is Power about. Never heard of it. Is it on Netflix?

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    Mute Paul Kossoff
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    Mar 16th 2021, 12:46 PM

    @Karen Delaney: Netflix have it Karen

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    Mute John ScouseSlayer Macken
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    Mar 15th 2021, 7:52 PM

    I’m gonna rewatch the wire.

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    Mute Mr_Bumkee
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    Mar 16th 2021, 12:59 PM

    @John ScouseSlayer Macken: Sheeeeeeeeeeeeeeyet!

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    Mute Chris Cantwell
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    Mar 15th 2021, 9:49 PM

    If anyone is looking for a good Crime series. Watch Altered Carbon, It won’t be everyone’s cup off tea, since it’s very similar to Ghost in the shell, But it’s 100% worth a watch.

    And also “The Alienist”, set in the 1800′s, Crime series. 2 Seasons. Great watch.

    All on Netlfix.

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    Mute Colette Kearns
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    Mar 15th 2021, 7:52 PM

    Movie called’I care a lot’ is a great watch.

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    Mute Philip Mckenna
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    Mar 15th 2021, 7:38 PM

    Was Lookin forward to The mountain between us, but my god it’s boring. Zzzz

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    Mute Jules
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    Mar 15th 2021, 11:15 PM

    Upgrade on Film 4 is not to bad

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    Mute David Cady
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    Mar 16th 2021, 7:28 AM

    I’m surprised you chose Batman over Superman, which isn’t the best outing for either, over Justice Leage: Snyder Cut. (Thursday 8PM Sky cinema). It’s the hyped, high-profile superhero pick of the week anyway. Unless you have Disney+, where the real pick of the week is Falcon and Winter Soldier, (Friday anytime after 8 AM).

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    Mute ShaneO'Mac
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    Mar 16th 2021, 9:14 AM

    @David Cady: I think they are making recommendations for TV that is available to everyone. Most households don’t have Sky Movies or Disney+.

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    Mute David Cady
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    Mar 16th 2021, 11:07 AM

    @ShaneO’Mac: maybe, but not everybody has Netflix either.

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