DUBLIN, Oct 11 (Businesshala) – Ireland will extend its COVID-19 wage subsidy scheme into the second quarter of 2022 as part of Tuesday’s budget announcement, hitting a key public finance target a year ahead of schedule, A source familiar with the process told Businesshala.
Ministers have so far said that the subsidy will be extended beyond the current end date of December, but not by how long.
The source said the scheme would be phased out after a period, the exact date of completion of which would be announced on Tuesday.
The government plans to use its budget for 2022 to ensure faster economic growth with some tax cuts, increased old age pensions, childcare subsidies and aid for those struggling to pay their fuel bills. Recovery further reduces the budget deficit.
The source said the 4.7 billion euro package – which would also boost capital spending, particularly in housing supply – would leave Ireland with a budget deficit of 1.7% to 1.8% of gross domestic product (GDP) next year.
The finance ministry on Saturday slashed its budget deficit forecast to 3.1% of GDP for 2021 from 5.1% forecast three months ago for lower spending and stronger tax receipts and economic growth.
This would mean that the government’s target of borrowing only for capital purposes, which was to be completed in 2023, will instead be met in 2022, the source said. (Reporting by Pedric Halpin; Editing by Hugh Lawson)