Budget 2022 hits right targets and right scale within an inflationary environment

Ibec, the group that represents Irish business, commended today’s Budget announcement from Government, in particular the targeted use of measures to help offset inflationary pressures for households and business. 

Ibec CEO Danny McCoy said: “Budget 2022 must be seen in the context of following the two largest years of fiscal expansion in the history of the State and massive supports for households and businesses. Today marks a return to a more normal budget by reducing the deficit as we step out of the Covid crisis, increasing investment in key areas in line with the National Development Plan and dealing with the day-to-day challenges facing the country within a tight overall envelope. 

“Ibec has called on Government to protect competitiveness and we see some promising measures here in terms of the extension of the wage subsidies through the EWSS, a package of income tax band indexation to offset inflationary pressures, targeted measures to reduce the cost of childcare and subsidisation of public transport for younger workers. Together these measures will help dampen rising cost pressures.

“For those sectors worst hit by Covid in the Experience Economy the extension of the EWSS and commercial rates waiver are welcome. The additional €100 million in funding for the sector to encourage a sustainable recovery will also help to re-open parts of the Experience Economy which are still struggling. The lack of an extension to the 9% rate of VAT is one unfortunate element of this year’s Budget and must be kept under review until August 2022.

“Finally, the announcement of €500 million of spending under the €1.1 billion Brexit Adjustment Reserve fund in 2022 is welcome. The decisions on allocation of that reserve funding for 2022 must contain significant measures to help support business dealing with ongoing Brexit uncertainties innovate and diversify. The measures must be available as soon as possible to give companies certainty.”