09 Oct 2019 | 01.12 pm
Budget 2020: No-Deal Brexit Measures
€220m state aids for agri-business sector
09 Oct 2019 | 01.12 pm
A package of over €1.2 billion was announced in Budget 2020 to boost the economy and assist those most affected in the event of a no-deal Brexit, writes Paul O’Brien (pictured) of KPMG.
Of this €1.2 billion, the minister announced that €200 million would be funded by government revenues, with the remaining €1 billion to be funded by borrowing if required. €650 million of the package will be used to support the Agriculture, Enterprise and Tourism sectors and the most affected regions.
The minister in his Budget speech recognised the agri-business sector’s position as a cornerstone of the Irish economy. In doing so, he acknowledged the challenges facing the sector at present, including globalisation, climate change and in particular, the possibility of a no-deal Brexit. In the face of these pressures, the government gave a clear signal that it stands ready to commit significant funding to the sector if required.
Of the €650 million noted above, the minister announced that €220 million would be made available immediately in the event of a no-deal Brexit as follows:
• €110 million to the Department of Agriculture, Food and the Marine to support affected parties and assist food companies to diversify into new products and markets. Of this, €85 million has been earmarked to provide assistance to beef farmers, with a further €6 million for other livestock farmers and the mushrooms sector, €14 million for fisheries and €5 million for the food and drinks processing industry.
• €110 million which is intended to fund a first wave of targeted new interventions to help vulnerable but viable businesses adjust to a no-deall Brexit. Support will be by way of grants, loans and equity investment and the food sector is specifically recognised as an area where such assistance may be appropriate.
Separately, the minister allocated €3 million in order to pilot new agri-environmental schemes in 2020. The stated intention for these schemes is to help reduce emissions from the sector, while improving bio-diversity and water quality, and supporting farm incomes.
Also contained within the €650 million noted above is €40 million for the tourism industry with further support if necessary – focusing in regions most affected by Brexit and key markets. Where the remaining €390 million of additional spending will be allocated will be determined at a later date.
The minister also announced €365 million will be provided for extra Social Protection expenditure on the Live Register and related schemes, with a further €45 million being made available to assist people to transition to new employment opportunities.
In addition, further Brexit readiness funding of €200 million will be provided in 2020 across a number of government departments and agencies to increase staffing, upgrade infrastructure at ports and airports and invest in Information Technology (IT) and facilities management.
The minister also announced that instead of paying a planned €500 million of tax revenues in 2020 into the Rainy Day Fund, the money would instead be held back for dealing with Brexit. €1.5 billion will however, be transferred into the fund from the Irish Strategic Investment Fund (ISIF).