€7bn July stimulus aims to 'protect as many jobs as possible'

“We are determined to protect as many jobs as possible and create new opportunities,” said Mr Martin after the Cabinet signed off on the huge financial injection for the economy.

Some €5.2bn of the funds are new, after the €2bn for the credit guarantee scheme.

Mr Martin said: "No-one should be in any doubt about the fact we are not returning to pre-March reality. The economic recession, which the pandemic has caused, is the most rapid and dramatic ever recorded.”

The Government is doing what it can to battle the impact of the virus, he said.

Among the top 50 measures included in the stimulus plan are:

• a 2% cut in the VAT rate from 23% to 21%, for six months from September;
• pandemic unemployment payments will continue until April, but will be gradually cut to the level of jobseeker's benefit;
• a revised wage subsidy scheme will be extended until the end of March;
• a 'stay and spend' tax rebate worth up to €125 per person to help the tourism sector;
• €200m in training and apprenticeship schemes, designed to help 75,000 people;
• €500m in capital funds and construction, with retrofitting, schools, sports, and tourism among the sectors to benefit;
• €450m in business funds, raising the restart grant from a cap of €4,000 to €25,000;
• increasing the Help To Buy scheme to €30,000, or 10% of the cost of a home;
• waiving commercial rates until the end of September, with €2bn also available under the credit guarantee scheme.

Tánaiste and business minister Leo Varadkar said the six-month reduction in the VAT rate, going down from 23% to 21% from September, will “be particularly beneficial for the retail sector, furniture stores, clothing shops, and also for pubs and restaurants”.

He also highlighted the €300m in grants for small and medium-sized businesses.

"The new grants will be open to more businesses, and the maximum amount available will increase from €10,000 to €25,000 and the minimum amount from €2,000 to €4,000," he said. 

"We're expanding the scheme to firms which employ up to 250 employees. We're extending it as well to a small number of businesses and organisations that weren't eligible in the past, including B&Bs and charity shops."

Significant investment will be pumped into cycling and walking facilities in cities and towns to encourage more people to use bikes and walkways.

Employers will be paid €3,000 for every apprentice they hire under a scheme developed by higher education minister Simon Harris. 

Green Party leader Eamon Ryan said employers will be paid €2,000 in the first year and €1,000 in the second year. The package also includes expanding the cycle-to-work scheme.

But Opposition parties took issue with the levels of support for low-income earners and struggling businesses. Sinn Féin leader Mary Lou McDonald said that there are more loans than grants in the plan, which will just add to debt levels. 

Furthermore, Ms McDonald said, the stay-and-spend rebate scheme, as opposed to a straightforward holiday voucher, is “cumbersome”, “clumsy”, and unfair if people don't have the money to spend in the first place.

Labour's Ged Nash said the level of ambition in the plan is "lacking".

Employers group Ibec welcomed the package as providing the “right mix”, but small firm organisations, as well as tourism and hospitality groups, said they are very disappointed that the Government has not delivered a targeted cut in Vat, warning that many firms won’t survive.

The Restaurants Association of Ireland said that the lack of a cut in the 13.5% Vat hospitality rate is “a nail in the coffin” for its businesses in border regions, given that firms in the North can avail of a 5% rate.

On the credit-guarantee scheme, the SME Recovery Ireland business group said that many SMEs are already too financially weak to risk-taking on further debt.