Budget 2021: Recovery, health and businesses at centre of ‘unprecedented’ €17.75bn package

The coronavirus pandemic has been the greatest challenge to face the country since it gained independence, Minister for Finance Paschal Donohoe said as he unveiled Budget 2021.

The Government has gone big on this budget and borrowing is not due to fall much next year. There has been a significant extension and increase in supports for businesses and the role of the State is now huge across the board.

“We have never experienced a challenge like this, but equally Ireland has never delivered such a strong response,” Mr Donohoe said, as he delivered his budget speech to a Dáil sitting in the Convention Centre.

Key points and analysis

Mr Donohoe described the nearly €18 billion (€17.75 billion) budget package as “unprecedented in both size and scale in the history of the Irish State.”

The budget had been drawn up based on the assumption of “the continued presence of the virus in our country next year and the absence of a broadly available vaccine,” he said.

Alongside Covid-19 and the threat of a no-deal Brexit, the Government also had to make progress on issues such as housing, improving healthcare and climate change, he said.

“From the ashes of the pandemic, together we will build a stronger and more resilient Ireland,” he said.

The Cabinet signed off on the budget at a meeting on Tuesday morning, with little disagreement between the three Coalition partners.

The budget will include a €3.4 billion recovery fund targeted at stimulating the economy and employment in the aftermath of Covid-19 and Brexit, as well as a €1.6 billion spend on capital programmes. These measures are to be the “cornerstone” of the Government’s budget, Mr Donohoe said. The Government has projected the expansive spending will lead to a €20.5 billion deficit next year, down just €1 billion from this year.

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Finance Minister Paschal Donohoe (L) and Public Expenditure Minister Michael McGrath arrive at Government Buildings in Dublin before outlining details of the budget to the Dáil. Photograph: Liam McBurney/PA Wire
Finance Minister Paschal Donohoe (L) and Public Expenditure Minister Michael McGrath arrive at Government Buildings in Dublin before outlining details of the budget to the Dáil. Photograph: Liam McBurney/PA Wire

Coronavirus

The budget will include a €3.4 billion recovery fund to stimulate the economy and employment in the aftermath of Covid-19 and Brexit, as well as a €1.6 billion spend on capital programmes.