- • 5 new Missions with trade focus for Department of Foreign Affairs & Trade and increased resources for Brexit response;
- • New €300 million low-cost Brexit Loan Scheme for Business
- • Doubling of additional Brexit-related staff for State Agencies
- • €25 million in loan schemes for Agri-food Sector
- • Supports for Capital Investment in the Food Industry and for Bord Bia marketing and promotion activities
- • VAT Rate on Tourism and Services Sector to Stay at 9%
The Government has today announced a series of measures to further prepare Ireland’s economy for the significant challenges arising in the context of Brexit.
Ireland will open new resident diplomatic missions in Chile, Colombia, Jordan, Vancouver and Mumbai as part of the Government’s overall Budget 2018 package. Additional funding will be directed towards augmenting Brexit resources, following recent steps to increase staff numbers working on Brexit at HQ and in major European capitals like Brussels, Berlin, Paris and London.
Speaking at the announcement today Minister Coveney said;
“The announcement of these new Irish Embassies and Consulates are important first steps in expanding our global footprint and diversifying our trade portfolio as we prepare for Brexit.
The new Embassies in Santiago, Chile and in Bogotá, Colombia will assist in promoting trade and investment with both countries. Chile is a high-income country, the most competitive economy in Latin America, and enjoys the region’s highest investment rating.
With almost 50 million people, Colombia has doubled its per capita income over the past decade. Ireland’s trade with Colombia has tripled since 2012 and a number of Irish companies are already active there.
We also plan to open an Embassy in Amman, Jordan, a highly strategic location in terms of our work and investment in the Middle East.
The opening of a Consulate in Vancouver in western Canada reflects the strength of the Ireland-Canada relationship, the growing economic importance of that region and also the fact that there is a large Irish community now living there.
The addition of a Consulate in Mumbai, India’s commercial capital, in Ireland House format* will significantly strengthen our presence in another of Ireland’s key strategic partners.
Additional funding for the Department of Foreign Affairs and Trade will support ongoing work by Ireland’s Brexit teams in Dublin, Brussels, Berlin, Paris and London and at Irish Embassies across the EU and help to ensure our influence as debate on Europe’s future gets underway.
“The measures announced today in Budget 2018 further demonstrate the Government’s strong commitment to preparing our economy for the unprecedented challenges posed by Brexit. This commitment spans a range of different measures, from sustainable fiscal policies to ensure our capacity to absorb and respond to economic shocks and make Irish enterprise more diverse, resilient and competitive, to dedicated resources to protect jobs and businesses in the sectors and regions most affected by Brexit.
The Tánaiste and Minister for Business, Enterprise and Innovation, Frances Fitzgerald T.D., stated:
“This is a pro-business Budget and the record level of multi-annual funding and the tax measures in Budget 2018 will allow us to work effectively with enterprises through the challenges of Brexit.
This Government’s focus is on supporting firms to increase their competitiveness, increase their innovation performance, diversify and grow exports and trade successfully on international markets.”
Specific Brexit measures will include:
• New €300m low-cost Brexit Loan Scheme for Business
A new €300m Brexit Loan Scheme will provide affordable financing to Irish businesses that are either currently impacted by Brexit or will be in the future. The new scheme is open to all trading SMEs and large firms employing less than 500. The scheme will see a sizeable reduction in interest rates charged for lending to circa 4%. The new scheme will be delivered by the SBCI through commercial lenders, to get much needed low-cost working capital into Irish businesses. The total Exchequer funding of the scheme will be €23 million, with the Department of Business, Enterprise and Innovation contributing €14 million and the Department of Agriculture, Food and the Marine contributing €9 million.
Speaking about the new €300m Scheme, An Tánaiste said:
“Businesses are telling me that access to working capital is a key issue for them and my Department’s research confirms this. The Brexit Loan Scheme will reduce the cost of borrowing and provide much needed headroom to viable Irish businesses at this uncertain time. In addition, I have asked my officials to progress with the Department of Finance and the SBCI and EIB the development of a Longer-Term Loan Scheme, together with a new Business Advisory Hub service, which would focus on business development to allow small and medium enterprise to position them for a post-Brexit environment.”
• Doubling of Additional Brexit-related Staff for State Agencies
An Tánaiste has secured an additional €3 million (EI - €1.3m; IDA - €700K; SFI - €400K; HSA - €400K and Department - €200K) which enables the recruitment of a further 50 staff, doubling the additional Brexit related posts to 100 in 2018 and to ensure a joined-up response to Brexit.
An Tánaiste said:
“I am delighted that we are in a position to double our additional Brexit-related staff to 100 to help Irish exporters to grow their international sales and diversify their markets, and to secure new investments for Ireland. Export sales are the critical lifeblood for our businesses and helping them grow in international markets is essential to sustaining quality employment in the regions. There are also emerging opportunities to attract new investment to Ireland and we need to ensure we have the required presence and expertise in target markets to win that investment for the regions."
Agriculture Measures - €25 million Brexit Response Loan Scheme for Agri-food Sector, Additional Supports for Capital Investment in the food industry and Bord Bia marketing and promotion activities.
The Minister for Agriculture, Food and the Marine, Mr. Michael Creed T.D., is bringing forward a comprehensive package of Brexit response measures for 2018 amounting to over €50 million.
In addition to the Brexit loan scheme outlined above (of which minimum 40% available to food businesses, a further €25 million is provided in Budget 2018 to enable the development of further Brexit response loan schemes for the agri-food sector. These schemes will be developed in 2018 in cooperation with the Strategic Banking Corporation of Ireland and others.
The Department of Agriculture, Food and the Marine will also provide supports for capital investment in the food industry to increase competitiveness and innovation, and additional supports for Bord Bia marketing and promotion activities.
Minister Creed commented:
“While these are challenging and uncertain times for the agri-food sector, the Government is determined to support our farm, fisheries and food enterprises to assist them to manage these difficulties and keep to the growth path agreed in Food Wise 2025.
The provision of support for vulnerable farmers, fishermen and for investment, innovation and market development in a food sector challenged by the uncertainty surrounding Brexit is a key feature of this year’s budget. The funding announced today will allow us to build on the work we have already done and to encourage the continued growth in our food exports which grew by 13% in the first half of 2017”.
Commenting on measures contained in the budget targeted at enhancing the competitiveness of the agri-food sector in order to mitigate the potential negative impacts of Brexit such as currency volatility, Minister Creed said:
“Ensuring that our food exporters, particularly our SMEs are competitive from a cost perspective, in the International market place is a basic element of how we will meet the challenges posed by Brexit. Therefore, building on the success of the low cost agri loan fund I announced in Budget 2017, my Department in conjunction with the Department of Business, Enterprise & Innovation has secured Budget funding for a new €300 million Brexit Loan Scheme to be delivered by the SBCI (Strategic Banking Corporation of Ireland) through commercial lenders.
This scheme will provide affordable, flexible financing to Irish businesses impacted by Brexit. Given the agri-food sector’s unique exposure to the UK market, my Department’s funding for this scheme ensures that at least 40% of the fund will be available to food businesses.”
• VAT Rate on Tourism and Services To Remain At 9%.
In order to help address overall uncertainty about the outcome of the Brexit process, its impact on Ireland’s tourism sector and on Border counties in particular, Budget 2018 also contains a commitment by the Government to leave the VAT rate on the tourism and services sector unchanged at 9%.
The Minister for Transport, Tourism and Sport, Shane Ross T.D., commented:
“It is undeniable that the 9% VAT rate has contributed hugely to the regeneration of the hospitality sector and to our tourism industry.
I am delighted to announce that we will be retaining it in 2018, recognising that many in this sector still need the benefit that the reduced VAT rate provides.
I would stress the importance of ensuring that competiveness and value for money is maintained – this is essential as we face the effects of Brexit - and I ask that everyone involved in the tourism and hospitality sectors adhere to this.”
Note to Editors: Ireland House format refers to colocation of DFAT Embassy/Consulate staff with their counter parts from Ireland’s State Agencies.