Dáil Motion re Covid Restrictions Support Scheme Minister for Finance, Paschal Donohoe TD

Check Against Delivery

I move this resolution.

This resolution seeks the approval of the House for a draft order which provides for additional support under the Covid Restrictions Support Scheme, the CRSS, to businesses forced to restrict access to their premises over the Christmas period.

I want to start by setting out the context for our debate, which is the unprecedented support being provided by the Government to assist businesses in Ireland through this pandemic.

This support has been economy-wide, and there has also been significant additional support for sectors that have been particularly impacted by the pandemic.

For example, the Tánaiste and Minister for Enterprise, Trade and Employment has put a range of measures in place to support businesses through loan and loan guarantees schemes, grant schemes and business training and advisory services. Supports are also available to assist businesses in moving online, in adapting to changed circumstances and also when they are restarting as restrictions are lifted.

Sector specific supports include the €55 million Tourism Business Support Scheme, the €5 million provided for Tourism Product Development, and the Coach Tourism Business Continuity Scheme; a €10 million fund to provide coach tourism businesses with a direct financial contribution to help support them with future operational and continuity plans.

For the arts and entertainment sectors, some €25 million was provided last June, including €20 million for the Arts Council, as well as additional supports for regional museums. A further €29 million was announced in the July stimulus, including funding for the Arts Council, Screen Ireland, our national cultural institutions, a music stimulus and supports for live performance.

Significant additional funding was announced in Budget 2021, with €130 million allocated to the Arts Council for 2021 and €50 million for supports for live performance. Many of the supports in 2021 included provision for the production of extensive online content.

A total of €5.5 billion has been spent on the Pandemic Unemployment Payment, with nearly half a million people receiving a payment this week.

Under my own Department and the Revenue Commissioners, the Temporary Wage Subsidy Scheme and the Employment Wage Subsidy Scheme have provided significant levels of economy-wide enterprise support.

Almost €3 billion was paid to 66,600 employers in respect of 664,500 employees under the TWSS. This has been replaced by the EWSS which provides a subsidy to qualifying employers based on the numbers of eligible employees on the employer’s payroll.

As of last Thursday, the Revenue Commissioners had made payments of €1.6 billion to over 43,000 employers in respect of almost half a million employees under the EWSS. In addition, over a quarter of a billion Euro in PRSI was foregone as a result of the lower PRSI for people on the EWSS.

The Revenue Commissioners have also assisted Irish businesses through the debt warehousing schemes, with 70,000 companies putting tax liabilities of almost €2 billion into these schemes.

I think that the unprecedented effort that the Revenue Commissioners have put into the operation of these supports should be recognised. They have provided much needed support in a timely manner to businesses that will mitigate the effects of the pandemic and allow them to resume and recover when the pandemic is under control.

Today, we are discussing the CRSS which has been an extremely successful intervention by the Government, aimed at providing support to businesses whose customers are prevented from accessing their premises because of public health restrictions. Again, I wish to acknowledge the work done by Revenue in getting the scheme up and running so quickly and providing additional much needed support to businesses.

As of this morning, 56,700 claims for CRSS payments of €239 million in respect of 20,000 premises had been made and €237.6 million of this had been processed for payment.

On considering the approach to easing public health restrictions in early December, the Government decided that additional seasonal support in the form of a double payment would be provided through the CRSS to qualifying business that would remain closed over the Christmas period under the restrictions.

This was in recognition of the additional financial impact on those businesses of being closed during a particularly busy trading period.

The relevant provision is contained in Section 11 of the Finance Act 2020, which was passed by the Oireachtas and signed by the President just before Christmas.

It provides that the Minister for Finance may vary the Scheme by order in a number of ways, including by varying the levels of payment (10% and 5% of average 2019 turnover) for a specified period of time.

The legislation sets out a number of steps to be taken before an Order varying the scheme can be made, including an assessment of up-to-date data regarding the economy and consultation with the Minister for Public Expenditure and Reform.

The assessment considered the scale of the Government’s intervention in the economy to support vulnerable individuals and businesses and to ensure that the economy will be in a position to recover when the pandemic is under control. It concluded that there was scope to continue the supports provided by Government.

Live Register data show that the Covid-19 crisis has continued to have a significant impact on the labour market in Ireland.

The assessment concluded that the sectors which are affected by the changes to the restrictions announced since the start of December are disproportionately affected because of their reliance on this part of the year to support leaner times in other parts of the year.

Businesses rely on strong retail sales in December and it is proportionately the most important month for them. Therefore, missing out on the expected stronger sales in December can be expected to have a significant effect on their annual turnover, with multiple implications for ongoing operation and survival.

The double payment for the three week period is intended to mitigate the effect of the December restrictions on businesses. A draft Order to implement this was laid before the Dáil on 13 January. The final part of this process is that the Order shall not be made unless a resolution approving of the draft Order has been passed by the Dáil. It is this resolution we are here to discuss today.

The CRSS is a targeted scheme aimed at businesses who are forced to restrict access to their premises on foot of health regulations. It is a part of the broad spectrum of Government supports being provided to assist businesses cope with the devastating effects of the Covid-19 pandemic to which I referred earlier.

The design and operation of CRSS is predicated on restrictions preventing or restricting access to business premises and that it only applies to such businesses. In designing the scheme, it was necessary to provide anchor points, including the concept of business premises, to which access is restricted.

This is because the public health regulations may make provisions in relation to restrictions in specific locations, such as a county or region or can operate nationally as is currently the case. Therefore, support could be provided to businesses who operate in a restricted location with reference to the physical location of their premises.

The CRSS applies to businesses carrying on trading activities from a business premises located in a region subject to restrictions, which requires the business to prohibit or considerably restrict customers from accessing their business premises, and as a result is operating at less than 25% of turnover in 2019.

I am aware that a number of businesses are not eligible for the CRSS for various reasons. For example, they may not operate from a fixed business premises. Or they do not have customers come into their premises to purchase goods or services.

Perhaps they provide goods or services to other businesses that are closed even though they themselves are open. Or maybe they are open but their customers cannot get to them because of public health restrictions. Or they rely on passing trade when there is none.

The vast majority of businesses in the State are affected by Covid but the CRSS is intended as a targeted scheme rather than a general support measure for the wider economy. However, the CRSS was specifically designed to provide additional support to the businesses who have had to close temporarily or significantly restrict access to their premises as a direct result of public health regulations.

That said, the Government has provided significant and unprecedented levels of support to the economy and this level of support will continue for as long as is necessary to mitigate the impact of the pandemic. However, it cannot continue indefinitely.

I do not propose to significantly amend the CRSS scheme. The scheme is based on the business premises being located in a region to which public health restrictions apply and access to these premises being restricted. It simply would not be possible to amend these parameters to allow businesses excluded by these criteria to become eligible.

The Government and l continue to assess the effects of the Covid-19 pandemic on businesses and the economy and I will continue to work with Ministerial colleagues to ensure that appropriate supports are in place to mitigate these effects.

In this regard, I understand that the Tánaiste has asked his officials to look further at what additional supports should be provided to businesses that are not eligible for CRSS. Additional sectoral funds for areas such as tourism have also been provided by the Government.

With the CRSS, we have put a clear scheme in place where funds can be quickly and easily claimed by eligible businesses. Clear guidance is available on the Revenue website on how to apply and who is eligible. This guidance is continually being updated, reflecting the types of questions that businesses are raising in relation to the scheme.

I consider that this is a successful scheme which achieves what we set out to do. It provides significant additional support to businesses located in regions subject to restrictions in terms of access to their premises.

It does this quickly and simply and provides support which is not sector specific. It is an advance credit for trading expenses and is operated by Revenue because of its tax base as well as Revenue’s efficiency in getting the funds to businesses.

The legislation allows certain limited flexibility within the parameters of the scheme, in terms of changes to the percentages of turnover which is the subject of the draft Order tabled for consideration today.

A draft Order providing for an increase in the levels of payment to 20% of average 2019 turnover up to €20,000 and to 10% of turnover above that amount for the three weeks beginning 21st and 28th December and 4th January has been laid before the Dáil. The resolution approves the Order and I commend it to the House.

ENDS