Budget 2021 verdict: Some good news but more to do

The budget announced today makes significant progress in addressing many of the needs of the most exposed members of our business community.

At Sligo Chamber of Commerce, we have been very conscious that the response to the devastating economic impact of COVID-19 must be far-reaching.

The Government must continue investment, spending and support for the most vulnerable parts of the economy. We must enable and empower our SMEs – the drivers of economic growth in our community to continue to compete and remain productive throughout the crisis.

The increase in funding for housing and infrastructure and the creation of a €3.4 billion Fund that will address impacts of both Brexit and COVID-19 is extremely welcome and will go a long way to ensuring a sustainable, equitable recovery across the island.

In addition to initial reaction here, Sligo Chamber in association with Chartered Accountants Ireland North West Society will provide more detail of the Budget 2021 over the next few days.

The theme of the Chambers Ireland Network Budget submission was “Place” and through it, we called on Government to support businesses to trade through the pandemic, by supporting liquidity, local economies and the long-term investment needs of the whole economy.

Our surveys highlights how badly businesses have suffered due to the pandemic where, on average, their revenue has faced a decline of approximately 30% and for businesses who have had to close, data shows they face on average €10,000 in re-opening costs.

In terms of today’s announcements, we welcome:

  • The commitment by Government to extend wage supports and provide funding for businesses who are forced to close is the right approach.
  • The combination of the new reduced 9% VAT rate for the hospitality sector, extension of wages support scheme throughout next year as needed is positive news.
  • So too is the introduction of the COVID Restrictions Support Scheme  – an appropriate targeted response which will support businesses into 2021.
  • The extension of Commercial rates waiver was key ask of the Chamber’s network and the additional funding of €300 million is welcome.

However, it must be said that in today’s budget, we see a missed opportunity.

We believe the Government could have been bolder in funding the recovery of urban centres – there is an opportunity for the National Economic Plan to improve on this, and we urge Government to use it.

While welcoming some of the commitments made, clear processes to deliver the funding allocated from Central Government to Local Government and businesses must be put in place as a priority.

Overall, this means investing in the places where we live and work, so that our town and region can thrive.