The Government is to introduce broad-based measures in next week’s Budget to help tens if not hundreds of thousands of businesses with their energy bills, the Tánaiste has said.
Speaking at Ibec’s President’s dinner in Dublin tonight, Leo Varadkar said there would be a particular focus on helping those in retail, hospitality, manufacturing and other high energy users.
He also said a new Ukraine Enterprise Crisis Scheme would be opened before the end of the year.
“It will be targeted at viable but vulnerable businesses in manufacturing and internationally-traded services,” he said.
“A similar scheme, the Sustaining Enterprise Fund operated by Enterprise Ireland during Covid approved over €180 million to 740 companies, protecting 30,000 jobs.
“We have a similar scheme in mind,” he said.
The Minister for Enterprise, Trade and Employment also said the Government will provide low-cost loans, similar to the Covid Credit Guarantee Scheme.
“Closer to home we will make sure my own department will receive an increase in staffing so that our enterprise agencies like Enterprise Ireland, IDA Ireland, Intertrade Ireland, local enterprise offices others can continue to secure investment, invest in companies, and provide good services to businesses, like timely turnarounds on things like employment permits,” he said.
Mr Varadkar said the Government would also make sure that incomes rise where the Government has influence, through things like the national minimum wage, the public sector pay deal, increases for pensioners and for people on welfare payments.
“We will also reduce income tax, so you get to keep more of the money that you earn,” he told the business leaders.
“And that’s really important for middle-income workers who often lose half of any pay increases they get in taxes, USC and PRSI, which is unfair.”
“It also puts more pressure on employers to increase wages and makes us less competitive when this is not the case in the UK, US or most of Europe.”
The enterprise minister also pledged that the Government would try to make people’s money go further by helping with some of the costs of things like childcare, college, or healthcare.
“We understand the scale of the crisis before us and we will respond with scale,” he said.
Mr Varadkar said we must plan for the possibility of corporation tax revenues declining in future years.
We can do that, he claimed, by investing some of the windfall in better infrastructure as well as holding some in reserve and reducing the national debt.
The Tánaiste told the gathering of the 750 business people that despite the challenges it faces, the Irish economy is in good health.
“Despite all the upheaval of the last two and a half years, Ireland has never had more people at work, youth unemployment is at a 16-year low and female labour market participation has never been so high. Incomes, notwithstanding inflation, have never been higher,” he said.
He also pointed to the budget surpluses that are being recorded.
Mr Varadkar also said the Government will help businesses invest in energy efficiency and reduce our reliance on fossil fuels over the medium term.
He said that while weaning ourselves off fossil fuels is a global challenge, it creates incredible opportunities for Ireland through the generation of offshore wind, battery storage, interconnection and green hydrogen.
“I believe it should be our ambition as a country to go from being an energy importer to being an energy exporter within a generation, with all the benefits that come with it – greater energy security and price stability, greater employment and regional development,” he said.
Mr Varadkar said he agrees with Ibec that the surplus in the National Training Fund should be used to plug the skills gap and indicated something in that regard could be announced in the coming months.
He also offered an assurance that the Government will not pull back on capital investment, despite the current challenges.
On housing, he said more needs to be done on housing as the 25,000 homes built in the past year is not enough, and instead Ireland needs to be building close to 35,000 a year.
Mr Varadkar said some politicians want to change Ireland’s economic and enterprise policy.
“They would increase taxes on businesses, talent and employment, veto trade deals and end support for further European integration,” he said.
“So, let me be blunt about that, if there is a fundamental change in our economic and enterprise policy, things will change fundamentally – and probably not for the better. We need to be live to that danger.”
“And not take our good economic performance for granted.”
Earlier in New York, Taoiseach Micheál Martin said the Government will take measures on the increased revenue that energy companies are receiving within the European framework, saying they would allocate some of the windfall back to consumers and households.
The Taoiseach also said there is “no room for energy companies to exploit this situation in any shape or form”, and those who are vulnerable should have no fears about being disconnected at any time.