July Stimulus gives breathing room for business, but long-term strategy for recovery will be needed, says Chambers Ireland
Chambers Ireland welcomes this afternoon’s announcement (23 July 2020) on the July Stimulus from Government. The measures include:
- Expansion of grant aid for business impacted by COVID-19
- Extension and reform of the Wage Subsidy Scheme beyond August, to March next year
- Extension of Commercial Rates Waiver
- Stimulus measures to support sectors vulnerable to pandemic social-distancing, including retail, hospitality and tourism
- Additional funding for active travel infrastructure
Speaking this afternoon, Chambers Ireland Chief Executive Ian Talbot said,
“Today’s announcements are a strong recognition of the gravity of the situation facing local economies and these measures will provide some breathing space for business until Budget 2021.
Ongoing commitments to a Wage Support Scheme, expanded grant aid and liquidity supports are welcome and have formed part of our own priority recommendation to Government in the past several weeks. The tax rebate for tourism will be also provide a welcome stimulus to the sector as it approaches the winter season.
The priority now must be to ensure that the schemes and funds announced are immediately available to business. There needs to be rapid implementation, clear communications, and equity in how these supports are administered around the country.
However, we are conscious that some of the announcements today, particularly the Rates waiver, may fall short of what is needed. Our own data has shown us how deeply impacted businesses in local economies have been because of COVID-19. Many will struggle to pay Commercial rates and other bills this year, which will leave Local Authorities in a very vulnerable position at a time when we need them to be supporting and investing in local economies more than ever.
We had called fora rates waiver, or write- off, for impacted businesses to be put in place for up to 12 months, with Local Authorities instead being funded by central Government. While the extension to the end of September is a welcome one, more may be required.
There is now a need to move towards a more strategic approach from Government – the first six months of the COVID-19 crisis have, of necessity, been characterised by reactive measures that have changed on a monthly, and sometimes, fortnightly basis. The actions taken so far have been commendable.
While understandably the initial State response was predicated on the COVID-19 crisis being a short, sharp shock, that is no longer a tenable position. Businesses that are trying to trade through these circumstances must consider timelines that cover 6-month, 12-month, and 18-month periods. If government activity is to be effective, it will have to provide the private sector with guidance that extends across such timespans.
COVID-19 has had an impact on the global economy akin to a world war, and like a war, unfortunately, its effects will be of indefinite duration. Added to this, in 5 months-time we are likely to be dealing with a no-deal Brexit that will do further damage to our trading and domestic economy.
Chambers Ireland welcomes the Cabinet’s action on the immediate crisis and we now call on the Government to take a wider view on what the trading and business landscape is likely to look like over the next two to five years. Such a long-term strategy will need to address how we retrain our people, create jobs, invest in infrastructure, and provide housing.
The upcoming Budget and proposed National Economic Plan will be the next opportunity to do this and we look forward to engaging with Government in the lead up to this.”