Wednesday 22 May 2024
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A pathway to recovery from COVID-19 for all communities and businesses in Cork – O’Shea

A pathway to recovery from COVID-19 for all communities and businesses in Cork – O’Shea

The first steps for communities in County Cork to emerge from current Covid-19 restrictions and support businesses to reopen have been announced.

Fine Gael Councillor John Paul O’Shea said a five-step, phased re-opening of the local economy and society in the coming months is the correct approach to take following the hard work and diligence shown by all in County Cork.

“Ensuring we can begin Phase One on May 18th, as well as continuing to suppress the virus and reduce the spread of infection, must be everyone’s top priority. Together, we can help reduce the number of cases in Cork by continuing to follow the health guidelines set out by the HSE.

“This week, we will begin to see some restrictions eased, including extending the exercise distance from your home to 5km and allowing those who are cocooning to take daily exercise, provided they have no contact with other people. However, it is important to note that it is possible for restrictions to be reintroduced if the rate of infection increases once again. This will be constantly monitored by the National Public Health Emergency Team and Government.

“The framework set out by An Taoiseach Leo Varadkar over the May Bank Holiday weekend aims to keep the rate of infection as low as possible while proportionately balancing continuing restrictions with the positive social and economic benefits brought about by lifting some restrictions,” Councillor O’Shea said.

“Physical distancing must continue. There are five phases in the recovery roadmap to ease restrictions but we can only move from one phase to the next if the spread of the virus stays under control. There will be a long-term need for physical distancing, for good hand hygiene, for respiratory hygiene, regular cleaning and for people to stay at home and isolate if they are sick.

“Entering the first phase in a safe and health-led manner has to be our priority. Let’s take it one step at a time.”

Phase One (18th May) measures include:

·           5km travel limit for exercise. Avoid unnecessary journeys. Small groups can meet outdoors.

·           Childcare allowed for essential healthcare workers.

·           Phased return of outdoor workers, provided physical distancing is adhered to. Remote working continues for all that can do so.

·           Open retailers that are mainly outdoor & home-ware, e.g. opticians, motor/bicycle & repair, office products, electrical, IT, phone sales & repair. All subject to physical distancing.

·           Open outdoor public amenities, including pitches, tennis courts and golf courses. Tourism sites, beaches and walking routes. Outdoor sporting and fitness activities, in groups max. four people can resume. Physical distancing must be adhered to.

·           Social distancing and hygiene measures continue for public and private transport as passengers increase. Specific measures at ports and airports.

Councillor O’Shea also said Fine Gael recognises people and businesses in Cork have been impacted in an unprecedented and negative manner by the worldwide pandemic.

“A suite of measures have been announced to help local businesses restart, rehire and reopen as soon as possible, provided it is safe to do so. To date, we have introduced emergency income supports, such as the Temporary Wage Subsidy Scheme and the Pandemic Unemployment Payment. Our focus now is to help get people back to work and reopen businesses. We will help them as they plan for the future and adapt to the ‘new normal’.”

The new measures for businesses are:

·           A €10,000 restart grant for micro and small businesses based on a rates/waiver rebate from 2019;

·           A three-month commercial rates waiver for impacted businesses;

·           A €2 billion Pandemic Stabilisation and Recovery Fund within the Ireland Strategic Investment Fund (ISIF), which will make capital available to medium and large enterprises on commercial terms;

·           A €2 billion COVID-19 Credit Guarantee Scheme to support lending to SMEs for terms ranging from 3 months to 6 years, which will be below market interest rates;

·           The ‘warehousing’ of tax liabilities for a period of twelve months after recommencement of trading during which time there will be no debt enforcement action taken by Revenue and no interest charge accruing in respect of the warehoused debt;

·           A commitment to local authorities to make up the rates shortfall, so that local authorities can continue provide full services to the public

“I would like to thank all my Fine Gael colleagues in Government who have worked so diligently. This is an unprecedented time and there is no manual on how best to deal with a crisis of this nature. With the spirit and courage shown by all in Cork since this began, I am absolutely confident we can come out of this stronger and more united than ever before.” Councillor O’Shea said.


Further Information:

Continued Stabilisation measures to support businesses announced include:

1.      Ireland Strategic Investment Fund – Pandemic Stabilisation and Recovery Fund

The Ireland Strategic Investment Fund (ISIF) is revising its investment strategy to establish a sub-portfolio within ISIF called the Pandemic Stabilisation and Recovery Fund.   This sub-portfolio will invest up to €2 billion of ISIF’s readily available capital in medium and large enterprises (more than €50m in annual revenue or more than 250 employees) to assist them meet the challenge of COVID-19.  It will complement ISIF’s extensive work to date within its existing portfolio of over 100 investments of €2.7 billion invested capital to mitigate the impact of COVID-19. 

The ISIF Pandemic Stabilisation and Recovery Fund will mirror the approach of ISIF’s existing and proven investment strategy:

The fund will act as an accelerator, investing on a commercial basis in businesses that can meet the investment requirements and can use ISIF investment to return to long-term viability.  

Investments can be across the range of instruments from senior debt, hybrid instruments to equity, and can be tailored to take account of the particular circumstances of each investee.  This will enable businesses to access the capital they need in the most appropriate form that best suits their individual circumstances.

In making investments, ISIF will seek to maximise the quantum of additional capital that the investee business can access from its existing shareholders and banks, from potential new co-investors and from European sources (such as the European Investment Bank), thereby minimising the amount of ISIF capital that may be needed.  To date, ISIF has led to overall investment levels of three times ISIF’s initial investment.  

Further details are available on the ISIF website.

2.       SME Credit Supports

Government moved quickly to put €1 billion of liquidity measures in place for SMEs by reorienting existing supports for SME credit and adding additional measures to address the demands arising from the crisis. These included repurposing the Brexit Loan Scheme, with the agreement of the European Investment Fund, to become the SBCI COVID-19 Working Capital Scheme.  Minister Humphreys also announced an expansion in this scheme to bring it to €450 million, an expansion in the Future Growth Loan Scheme to above its original allocation of €300 million, and improvements in the maximum loan size available to COVID-19 affected microenterprises from Microfinance Ireland along with reductions in the interest rates.  This means that microenterprises can avail of loans of up to €50,000 with no interest and principal repayments in the first six months.  In addition, Minister Humphreys has introduced a range of grant measures, such as the €180m Sustaining Enterprise Fund for manufacturing and international services sector.

Government has announced the €2 billion COVID-19 Credit Guarantee Scheme.  It will provide an 80% guarantee on lending to SMEs until the end of this year, for terms between 3 months and 6 years.  SMEs will be able to go directly to the banks in the Scheme, and the guarantee can be used for a wide range of lending products between €10,000 and €1 million that have a maximum term of 6 years or less.  It will be available to all SME sectors, including primary producers.

Interest rates will be below current market rates.  This Scheme forms a major component of the Government’s strategy to aid SMEs in these difficult times.

The COVID-19 Credit Guarantee Scheme is a further development of the existing Credit Guarantee Scheme which is already available from AIB, BOI and Ulster Bank, and it will be possible for other lenders to get access to the Scheme.  Lenders will be subject to a portfolio cap of 50%.  This reduces the contingent exposure to the Exchequer, meaning that the size of the Scheme can be larger.

Implementing this scheme will require legislation, the drafting of which has been approved by Government. In parallel with the drafting of the legislation and its passage through the Houses of the Oireachtas, the Department of Business, Enterprise and Innovation, the Department of Agriculture, Food and the Marine, the Departments of Finance and Public Expenditure and Reform, and the Strategic Banking Corporation of Ireland will work to put in place arrangements to ensure that the Scheme can be implemented as soon as possible after the enactment of the legislation.

3.      Revenue Warehousing of Tax Forbearance

The Revenue tax deferrals have been a vital liquidity support that is easily accessed by those businesses severely impacted by COVID-19.  This allowed these businesses to retain cash, which proved to be a key liquidity support and also gave an assurance that the State will support these businesses through the pandemic.  It is important that companies availing of this forbearance must continue to file tax returns and keep in contact with  Revenue, which ensures tax compliance and assistance is targeted at those most in need. 

It is also recognised that businesses need clarity on how and when this level of tax debt forbearance will be gradually unwound to allow firms to trade their way back to profitability and repay this assistance.  In the normal course, Revenue would work closely with businesses to put in place arrangements, appropriate to the circumstances and viability of each business, to secure payment of those debts over a reasonable timeframe.

However, in the current circumstances, businesses that have had to close or have been significantly impacted by the restrictions will not be able to enter into arrangements to clear the COVID-related tax debt, pay their normal trade and other non-Revenue creditors, make any necessary restructuring to deal with the new trading arrangements in the context of social distancing, build up their stock, etc. In that context, Revenue will Warehouse Deferred Tax Liabilities associated with the COVID-19 crisis.  This will represent a direct support for affected businesses where a commitment to a phased payment arrangement is not possible.

Arrangements will be put in place to allow debt that cannot be paid during the COVID-related period, to be warehoused interest-free for a year from recommencement of trading, during which time there will be no debt enforcement action taken by Revenue in respect of the debt.  Moreover, there will be no interest charge accruing in respect of the warehoused debt (no capital or interest payments).  Prior to the expiry of the warehousing period, the business will be expected to engage with Revenue to reach an agreement on an exit strategy more suited to the specific business needs and the need for continued viability.  Businesses will qualify for a significantly reduced rate of interest of 3% on outstanding debts on agreement of such arrangements, to be set out in legislation. For continued qualification by businesses for these arrangements, it will be a prerequisite that the businesses remain compliant with all their return filing and tax payment obligations in respect of tax periods that postdate the periods covered by the warehoused debt.   The operational details are being finalised and the necessary legislative amendments will be brought forward in Finance Bill 2020.

The scheme will apply to businesses in all sectors of the economy who have been negatively impacted by COVID-19, and further underlines the Government’s commitment to supporting business and positioning the economy for return to a new normal when the time comes.

Further details are available on the Revenue website.

4.      Commercial Rates Payment Break/Reductions

The Government prioritised support for those businesses most directly affected by Covid-19 with its decision in March to defer rate payments for a three month period for the hospitality, retail, leisure and childcare sectors. While a review of options to support enterprises and employment is being commenced, the Government recognises that many businesses are facing immediate difficulties and uncertainty. To provide clarity, commercial rates are being waived for a three month period beginning on 27 March for businesses that have been forced to close due to public health requirements. This measure will complement the tax, banking and SME measures also announced today.

The Government will continue to actively engage with business owners and representative bodies. Local Authorities, who have longstanding experience in dealing with ratepayers and showing an understanding of their financial situations, are assessing the impact of Covid 19 by engaging directly with individual ratepayers, recognising that there may be impacts on sectors outside of those initially identified as being most under threat. It is estimated that this waiver will reduce Local Authority income by €260 million and the Exchequer will meet these costs.

5.      Provision of a Restart Fund for micro and small businesses

The economic impacts of Covid-19 have been felt across the country and particular for small or micro firms. Measures that have been announced including income support schemes and enhanced liquidity supports have played a role in supporting these firms but as we move towards the next phase of the pandemic it is necessary to introduced further targeted supports in this area.  In this context it is intended to create a Restart Fund of €250 million for micro and small enterprises.

The purpose of this fund will be to assist these businesses in reconnecting with the market, their employees and their customers. Details of the scheme will be worked on by the Department of Public Expenditure and Reform in consultation with the Departments of Business, Enterprise and Innovation and Housing, Planning and Local Government and finalised in the coming weeks but it is intended that the fund will operate through a system of rebates/waivers of commercial rates payments from 2019. It is intended that companies will receive a total amount equivalent to no more than their 2019 rates bill and that there will be a cap per business of €10,000. This fund can act as a further targeted support to small and micro enterprises that have been impacted by Covid-19.