Government cannot ‘empty the tank’ with budget energy supports, Varadkar says

The Government’s energy supports for businesses in next week’s budget will be targeted at small and medium-sized enterprises (SMEs) in retail, hospitality and manufacturing, according to the Tánaiste and Minister for Business, Leo Varadkar.

Speaking at the employers’ lobby group Ibec’s president’s dinner in the RDS on Thursday evening, Mr Varadkar said the Government would not “empty the tank” of cash available to ease the effects of the energy crisis, which has resulted in a quadrupling of electricity bills for some businesses.

“We will keep resources in reserve so that we can respond as the situation develops and intervene again if we need to, if this crisis persists,” he said. But he also conceded that the State should not run a large budget surplus “when a countercyclical approach is required”. The current surplus is running at well over €6 billion, buoyed by corporation tax receipts.

Mr Varadkar told the Ibec dinner that Government assistance for companies with their energy bills would be “broad-based and tens of thousands of businesses will qualify”.

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He also indicated that the Government would tap the €855 million surplus in the national training fund (NTF), which is funded by a 1 per cent levy on private-sector payrolls, to help businesses.

Retail Ireland, a division of Ibec, suggested in its pre-budget submission that the surplus be used to fund rebates of NTF contributions to businesses. Mr Varadkar’s comments, however, suggested that any move to tap the NTF was not imminent and may not be included in the budget next week: “Hopefully we can announce something in that regard in the coming months.”

He also reiterated the Government’s intention to run a public communication campaign to remind people of the benefits to Ireland of international trade and foreign investment. In a thinly-veiled dig at Sinn Féin, he said it was “worrying” that some politicians “are sceptical of free trade and even oppose existing or new free-trade agreements”.

The public information campaign was first proposed in the Government’s new trade strategy, launched by Mr Varadkar’s department in April.

“We are going to launch a communications campaign to highlight the benefits of international trade and investment to a broader Irish domestic audience and foster a deeper understanding of the important role that trade and investment plays in providing jobs,” he said.

He also said that “an agreed way forward” had emerged between unions and employers’ groups over the issue of furthering collective bargaining rights for union members. Ibec has participated alongside trade unions in a working group established by Mr Varadkar to examine the issue.

“I look forward to hearing people’s views when I publish the report next month,” he said.

The Tánaiste struck an optimistic note towards the end of his speech, when he challenged the “pessimistic” view that taxes would have the rise merely for public services to stand still.

“My vision for Ireland for the next 20 years is a positive one: a growing population, 6.5 million people; more than three million jobs; more investment; more trade; a society and economy that embrace new technologies of the digital and green transitions and opportunities to create new wealth.”

He said Ireland did not need to fear the future: “We should own it.”