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Ireland’s July stimulus ‘twice as large as that of UK’

Finance Minister Paschal Donohoe said it is equivalent to 3% of national income.

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Minister for Finance Paschal Donohoe arrives at Dublin Castle for a cabinet meeting (Niall Carson/PA)

Minister for Finance Paschal Donohoe arrives at Dublin Castle for a cabinet meeting (Niall Carson/PA)

Minister for Finance Paschal Donohoe arrives at Dublin Castle for a cabinet meeting (Niall Carson/PA)

Finance Minister Paschal Donohoe has said Ireland’s July stimulus plan is twice as large as that of the UK in relative terms, with a higher spend per person.

The Government announced its long-awaited six billion euro stimulus plan on Thursday, which included a surprise cut to VAT and an extension of the help to buy scheme for first-time buyers.

Mr Donohoe and Government ministers have been defending the plan for the economy, which opposition parties have described as a “missed opportunity”.

On a per capita basis, this package represents 1,000 euro for every Irish citizenPaschal Donohoe

Speaking at a press conference in Dublin on Friday, he drew comparisons between the scale of the Irish package and the UK package announced a few weeks ago.

He said: “The UK recently announced a summer package of £30 billion, approximately 1% of UK national income.

“This package is equivalent to 3% of our national income. On a per capita basis, this package represents 1,000 euro for every Irish citizen.

“By comparison, the UK package was around £450 for every UK citizen.”

Mr Donohoe called on “profitable” retailers to pass the VAT cut on to consumers.

VAT was cut from 23% to 21% as part of the stimulus plan to help boost business and encourage spending.

“We recognise the pressure that retailers are facing, that our shops are facing, at the moment,” he said.

“There are fewer customers coming into them.”

He said while it is up to retailers to decide whether to pass the VAT cut on to customers, he wants to see large and “profitable” businesses giving the discount to consumers.

“We want all retailers to pass on the VAT cut but we do recognise that for some retailers their situation is so precarious that they might pass some of it on to customers and keep some to retain their people employed,” he said.

Elsewhere on Friday, Taoiseach Micheal Martin defended the July stimulus and said it will ensure companies can stay intact and get through the coming months.

Mr Martin said the extension of the Temporary Wage Subsidy Scheme and the Pandemic Unemployment Payment were the key planks of the scheme.

He said the addition of commercial rates relief and a reduction in VAT will give businesses “more than a fighting chance”.

”The plan will give hope and confidence and a degree of certainty to businesses who have shown they are committed to staying in business,” he told RTE radio.

“The Government will work to keep the fabric of the Irish economy intact over the coming months.

“This plan will work and it’s designed to be brought in immediately, but the Government will continue to oversee it.”

PA