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Jobs at heart of Budget 2013 - Bruton

New €700million seed and venture capital scheme to support hundreds of innovative Irish companies.

Package of tax measures to support SMEs.

Speaking at a press conference following today's Budget, Jobs Minister Richard Bruton said:

The Government in Budget 2013 made the choice to support job-creation by avoiding increases in income tax, and restated the Government’s absolute commitment to the 12.5% corporation tax rate.

This Budget will enable the delivery of a range of new and improved supports for companies in need of credit. The Government is using scarce resources to leverage funding from the private sector to provide credit for businesses across the spectrum of sizes and sectors. Some of these supports include:

  • Seed and venture capital scheme. €175million exchequer funding is expected to leverage a further €525million in private sector funding to create a total of €700million available. Well over 100 innovative Irish companies are expected to benefit, with thousands of jobs created and hundreds of millions of euros in additional exports generated. Full details will be announced as part of Action Plan for Jobs 2013
  • €25million additional exchequer allocation under the Development Capital Scheme which will now provide a total of €225million in funding to mid-sized indigenous firms, to target the development of a strong mittelstand-type indigenous sector
  • The National Pensions Reserve Fund is developing a range of support funds for the SME sector, initially ranging in size from €100million to €400million, to provide equity, credit and recovery investment
  • Continued implementation of the €90million microfinance scheme, the €450million Credit Guarantee Scheme and the €120million second call under Innovation Fund Ireland

A package of new tax measures to support SMEs was outlined by the Finance Minister Michael Noonan, including:

  • A 25% increase in the threshold for VAT cash receipts basis accounting, to improve cashflow for SMEs. The threshold will be increased from €1million to €1.25million
  • Doubling the amount of expenditure that qualifies for the R&D tax credit for SMEs, to support more innovation by businesses. The threshold that applies without reference to the ‘2003 base year’ (which principally applies to larger businesses) has been increased from €100k to €200k
  • Extending the Employment Investment and Incentive, which was due to run out in 2013, to 2020. This supports investment in businesses by providing income tax relief of up to 41% on investments totalling up to €10million per company

The Minister also announced that his Department’s capital budget has been broadly protected for 2013 with a total allocation of €505million after agreement was secured on retention of own resource income and capital carryover. Among the measures this will deliver include:

  • Delivery of DJEI measures under Action Plan for Jobs 2013, to be announced early next year
  • IDA will target approximately 12,000 new jobs in 2013 with its capital budget fully protected
  • Enterprise Ireland will support 95 new High Potential Start-Up companies with commitments to create at least 1000 new jobs. EI through the new Potential Exporters Division will also engage with 300 new first-time exporting companies
  • Delivery of three new Technology Centres in Pharmaceutical Production, Data Analytics and Connected Health to support the commercialisation of research ideas, spin-out companies and job-creation. The network of 15 Technology Centres will interact with 250 companies in 2013

Minister Bruton concluded:

I am pleased to say that today’s Budget shows the priority that this Government attaches to rebuilding the economy and creating the jobs and growth we need. In a very difficult Budget, SMEs are being prioritised with a package of pro-jobs tax measures, the capital budget for enterprise supports is being protected, and a series of innovative finance schemes being delivered to leverage exchequer funding with private funding to deliver the credit our businesses badly need.

Read the full press release here.