Existing Financial Supports Too Restrictive – Chambers Ireland Calls for Fresh Approach and Expansion of Payments

Existing Financial Supports Too Restrictive – Chambers Ireland Calls for Fresh Approach and Expansion of Payments

Chambers Ireland today (21 January 2020) calls on Government to substantially rethink and refresh the range of COVID-19 supports available to businesses over the coming months.

Speaking this morning, Chambers Ireland Chief Executive Ian Talbot called Government to urgently examine the suitability and effectiveness of existing supports, with a view to both their expansion and a clear transition process for their gradual removal to allow time for businesses to recover in the period immediately after restrictions are eased.

“Our network of Chambers is hearing that the criteria for accessing schemes are far too narrow. Wage supports and grant payments are helping qualifying businesses, but too few businesses qualify.

As an example, the CRSS is limited to businesses that are public facing. This excludes many businesses that have been directed to shut in the latest wave of restrictions; non-essential retailers may receive assistance because of the closures meanwhile their suppliers do not.

Chambers Ireland raised such problems with the Department of Finance while the Finance Bill was being drafted in the autumn, during what were then localised lockdowns.

The current, even more stringent, restrictions mean that far more businesses have been shuttered. It is now even more important that support schemes are expanded so that they are effective. If CRSS itself cannot be revised immediately, then new payments that support business that have been forced to close are needed.

Government is in a well-placed position to expand supports – this is what the Contingency Fund in Budget 2021 is for – meanwhile the tax receipts have been healthier than expected and the government continues to be able to access finance at low interest rates.

The prudent action for Government is to support the business community through this crisis with supports ambitious enough to meet the challenges that the economy faces, supports that are administratively simple and easy to access.

Without this intervention, the growing debt burden experienced by businesses will likely trigger a wave of insolvencies and job losses that will permanent scar local economies throughout the country. Such a crisis risks hobbling the national economy just as we need it to rebound.

Infection rates and, sadly, death rates, are still far too high, but with mass vaccination underway, an end to this crisis is in sight. Later in the year, the sectors that have been most affected by public health closures will have an opportunity to bounce back, Government needs to ensure that they will survive to take that opportunity.

A realistic plan for reopening is needed if businesses are to be able to make sound financial decisions over the coming months. There cannot be a cliff edge for supports that suddenly cease. Wage supports must be tapered off over a reasonable period of time, re-opening grants must be made available, and existing supports such a debt-warehousing and VAT reductions must continue.

We cannot afford to under-react to the challenge facing us. The coming months will be extremely challenging and local economies must be supported.”

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