News & Events

Tánaiste welcomes pro-business, Brexit-focused Budget

10th October 2017

  • New €300 million Brexit Loan Scheme for Business

  • Doubling of additional Brexit related agency staff to 100

  • New €25m Regional Fund Competitive Call from Enterprise Ireland

  • Tax package to support Enterprise and investment to attract jobs to Regions

  • Investment in PhD & Research Masters Programme to meet enterprise skills needs

  • SFI Research Centres to increase from 12 to 17 with new Capital funding

  • Ireland to become a member of European Southern Observatory in 2018  

An Tánaiste and Minister for Business, Enterprise and Innovation, Frances Fitzgerald TD, along with Minister Pat Breen and Minister John Halligan, welcomed record funding in Budget 2018 totalling €871 million for the Department of Business, Enterprise and Innovation. This allocation is almost €48m above the published ceiling of €823m for her Department[1] with a Capital budget increase of €40m on the published ceiling to €560m – a record Capital allocation for the Department - and will increase by a further 7% to €600m in 2019 and 2020. 

“The choices the Government set out today strike the right balance between maintaining the stability of our public finances, improving our competitiveness and supporting enterprise job creation, so as to ensure we have the resources we need to deliver on our public policy objectives in the areas of housing, childcare, health and education,” noted AnTánaiste in welcoming Budget 2018.

Responding to Brexit Challenges

“This is a pro-business Budget and the record level of multi-annual funding and the tax measures in Budget 2018 will allow us to work effectively with enterprises through the challenges of Brexit. This Government’s focus is on supporting firms to increase their competitiveness, increase their innovation performance and to diversify and grow exports and trade successfully on international markets”, commented An Tánaiste.  

Brexit: New €300m low-cost Brexit Loan Scheme for Business

A new €300m Brexit Loan Scheme will provide affordable financing to Irish businesses that are either currently impacted by Brexit or will be in the future. The new scheme is open to all trading SMEs and large firms employing less than 500. The scheme will see a sizeable reduction in interest rates charged for lending to circa 4%. The new scheme will be delivered by the SBCI through commercial lenders, to get much needed low-cost working capital into Irish businesses. The total Exchequer funding of the scheme will be €23 million, with the Department of Business, Enterprise and Innovation contributing €14 million and the Department of Agriculture, Food and the Marine contributing €9 million. 

Speaking about the new €300m Scheme, An Tánaiste said: “Businesses are telling me that access to working capital is a key issue for them and my Department’s research confirms this. The Brexit Loan Scheme will reduce the cost of borrowing and provide much needed headroom to viable businesses at this uncertain time. In addition, I have asked my officials to progress with the Department of Finance and the SBCI and EIB the development of a Longer-Term Loan Scheme, together with a new Business Advisory Hub service, which would focus on business development to allow enterprises to position them for a post-Brexit environment.” 

Doubling of additional Brexit related staff for agencies 

An Tánaiste has secured an additional €3 million[2] which enables the recruitment of a further 40-50 staff to bring the total additional Brexit related posts up to 100 in 2018 and to ensure a joined-up response to Brexit. 

An Tánaiste said: “I am delighted that we are in a position to recruit an additional Brexit-related 50 staff to help Irish exporters to grow their international sales and diversify their markets, and to secure new investments for Ireland. Export sales are the critical lifeblood for our businesses and helping them grow in international markets is essential to sustaining quality employment in the regions. There are also emerging opportunities to attract new investment to Ireland and we need to ensure we have the required presence and expertise in target markets to win that investment for the regions." 

Driving Entrepreneurship, Business Competitiveness and ensuring Work Pays

Having engaged extensively with Minister Donohoe on the tax proposals in the budget, An Tánaiste welcomes the following measures to support enterprise:

-  New Key Employee Engagement Programme (KEEP), a new SME share based remuneration incentive, to help SMEs to scale, internationalise and attract and retain skills and employees, and that any gain on exercise be subject to Capital Gains Tax at time of disposal, thereby reducing tax payable by between 15 and 19%;

-  The increase in the Earned-Income Credit for Self-Employed by €200 to €1,150, a further step towards achieving parity with the PAYE credit;

-  Reductions to the USC rates which continue the Government’s focus on ensuring work pays and the reduction of the marginal rate of tax for middle income earners to 48.75%;

-  The extension of accelerated capital allowances for energy efficient technologies and equipment to 2020 will help to meet our climate change objectives and boost firm level competitiveness;

-  Sustained Exchequer capital investment of €63m via Enterprise Ireland (EI) and €22.5m through the Local Enterprise Offices and the roll-out of Business Sustainability and Competitiveness Programmes. In addition, EI will utilise Own Resource Income (ORI) to support a range of enterprise development initiatives next year. Typically, such ORI is in the region of €65m+ per annum;

-  Roll-out of Enterprise Ireland Regional Investment Fund with a 2nd Call for Proposals with funding of €25m in Q1 2018; 

Minister of State for Trade, Employment, Business, EU Digital Single Market and Data Protection, Pat Breen TD said: “The regional spread of employment growth is particularly encouraging with 4 out of every 5 new jobs are being created outside Dublin and the Local Enterprise Offices (LEOs) are a key element in supporting entrepreneurship and enterprise throughout the regions. The LEOs supported a record 3,680 new jobs in 2016. Two-thirds of all EI supported jobs are also in the regions.Funding for the LEOs has increased from €18.5m two years ago to €22.5m for next year supporting 34,000 jobs across all regions. I am also delighted that Enterprise Ireland can proceed with a further competitive fund call for proposals for €25m to support regional initiative early in 2018”. 

Attracting Foreign Direct Investment to the regions

Attracting FDI to the regions is an integral part of our growth strategy and these measures below will help us to enhance our offering:

-  Continued commitment to Ireland’s 12.5% Corporate Tax rate;

-  Sustained funding for IDA for its Regional Property Programme by progressing 6 Advance buildings;

-  Changes to the treatment of Intellectual Property transferred to Ireland, which will provide certainty on Ireland’s competitive offering across the entire research-to-market lifecycle and further our objective to increase substance located in Ireland. 

An Tánaiste said: “IDA’s Capital programme has increased by 45% in the past 2 years from €95m to €137m and today’s budget will support the ongoing rollout of its Regional Property Programme. This will allow for the completion of Advance Buildings in Galway, Athlone, Dundalk and Limerick in 2018. Design on similar buildings in Waterford and Carlow will also be progressed during the year with a view to their completion in 2019. The Regional Property Programme, by helping to ensure property solutions are in place for overseas companies considering investing or expanding in regional Ireland, remains an important tool in our collective efforts to see FDI spread as evenly as possible across the country.” 

Supporting Innovation for Competitive Advantage 

Additional funding is also being allocated to bring the number of Research Centres funded by Science Foundation Ireland (SFI) to 17 up from 12 at the beginning of 2017. In addition to the 4 new Research Centres announced last month, an additional €4.25m is being allocated today to develop a new SFI research centre – the SFI FutureMilk Centre – in 2018. This new SFI Research Centre will be led by Teagasc, in partnership with the Tyndall National Institute and universities and institutes of technology throughout the country. 45 industry partners have committed €16m to the new Centre. This new Centre will be an agent of growth for the Irish dairy industry by being a world leader in research for precision pasture-based dairying.

A major investment is being made through the allocation of €7.5 million for a new PhD and Research Masters Programme to meet enterprise skills needs. In 2018, the programme will provide funding for 150 new enrolments in disciplines aligned to enterprise needs. This programme will address a key action of Innovation 2020 to increase the enrolment of postgraduate researchers by 500 places by 2020.

The increased capital budget for Innovation will allow Ireland to join the European Southern Observatory (ESO) in 2018. The benefits of membership are significant and include the creation of advanced enterprise relevant skills in areas such as data analytics, software and photonics. Membership will also ensure Irish companies can compete for ESO contracts to develop innovative products and services. 

Minister for Training, Skills, Innovation, Research and Development, John Halligan TD said: “Investment in human capital is critical if we are to maintain and build Ireland’s competitiveness. We know that skills are the key differentiator in attracting and retaining Foreign Direct Investment as well as building Research, Development and Innovation capacity in our indigenous enterprises. I am delighted that today we are announcing this package of measures to make further progress on our implementation of Innovation 2020."

“I particularly welcome the additional capital which will enable SFI to fund a new Research Centre, bringing to 17 the number of world class research centres in Ireland focused on areas ranging from premature baby health to nanotechnology and software engineering. The additional capital will also enable Ireland to progress its membership of the European Southern Observatory, which will see the creation of advanced enterprise relevant skills in areas such as software, data analytics and phototonics", concluded Minister Halligan.

ENDS 

For further information, please contact Press Office, Department of Business, Enterprise and Innovation 01 631 2200 or press.office@dbei.gov.ie

Note to Editor on Capital allocation

Overall:

-  Department of Business Enterprise and Innovation (DBEI) allocation for 2018 is €871 million, this is almost €48m above the Mid-Term Expenditure Report 2017 published ceiling of €823m.

-  DBEI Capital budget is up €40m on the published 2018 expenditure ceiling of €520m and rises to €560m in 2018 – a record Capital allocation for the Department - and will increase by a further 7% to €600m in 2019 and 2020. 

€300m Brexit Loan Scheme for Business

An Tánaiste has designated funding for a Brexit Loan Scheme, in partnership with the Minister for Agriculture, Food and the Marine, which will provide affordable financing to Irish businesses that are either currently impacted by Brexit or will be in the future. The scheme aims to make up to €300 million available to businesses with up to 499 employees at a proposed interest rate of circa 4%. This rate represents a significant saving when compared with the prevailing rates that are otherwise being offered for similar loans on the market. The scheme will be delivered by the Strategic Banking Corporation of Ireland (SBCI) through commercial lenders to get much needed working capital into Irish businesses. The Strategic Banking Corporation of Ireland (SBCI) is the national promotional institution operating as a wholesale funder with the support of the EIB Group, KfW, CEB, ISIF and the NTMA.  It is also the risk sharing conduit for EU loan guarantees provided through the EIF, part of the EIB Group. It is the SBCI’s mandate to enhance access to low cost flexible financing to the Irish SME market. The total Exchequer cost of the scheme in 2018 will be €23 million, with the Department of Business, Enterprise and Innovation contributing €14 million and the Department of Agriculture, Food and the Marine contributing the remaining €9 million. Further details of the Brexit Loan Scheme will be provided in the coming weeks and will be made available on the Department’s website - www.dbei.gov.ie. 

Enterprise Agencies

Through the productive investments being made via the enterprise agencies [Enterprise Ireland, IDA Ireland, Local Enterprise Offices] their supported client companies have been adding 70 net new jobs perday since 2015, and have delivered over 50,000 (net) new jobs in the years 2015 and 2016 combined.

Government is sustaining the enterprise and innovation capital supports via the Department of Business, Enterprise & Innovation at €560m next year.

In addition, the enterprise agencies typically utilise a further €100 million or so in Agency Own Resource Income in support of enterprise development across the regions next year.

  • This level of sustained productive investment will enable EI, IDA and LEOs to continue to directly support over 435,000 jobs across their client base in every region of the country.
  • The 2018 capital supports should also allow the Enterprise agencies to create a further 20,000+ net new jobs in 2018 and build further on the similar number of new jobs likely to be delivered by the supported client base during 2017.

This would bring the direct jobs being supported across the Enterprise Agencies to in excess of 470,000 jobs by the end of 2018.

Allowing for the multiplier effect, for every job being supported by the enterprise agencies, there is 1 other job in the economy being supported indirectly in services and sub-supply.

Therefore, by the end of 2018 it is anticipated that through the productive capital investments of the enterprise agencies in excess of 900,000 jobs would be sustained across all regions of the country. 

Enterprise Ireland Deliverables in 2018

At the end of 2016 EI clients were directly supporting 201,000 jobs:

  • Jobs: EI strategy is to both grow AND maintain jobs, in the face of Brexit. under its target to support 60,000 new jobs to 2020, EI is targeting growth in employment in their supported client base to continue during 2018 and that the Agency will be directly supporting in excess of 410,000 jobs next year.
  • Exports: EI Strategy is to continue to support exports to the UK while growing and diversifying outside the UK. EI aim to grow exports from €21.6bn in 2016 to € 23bn in 2017 and out to €26bn by 2020. A new Eurozone export strategy, to double exports by 2020, is being rolled out over 2017/2018.
  • Regional Development: EI will deliver up to 25 significant projects such as Innovation Centres, Enterprise Hubs, Regional Accelerator Programmes and Sectoral Cluster Initiatives etc to boost each region’s capacity to generate new enterprises and jobs, as part of the €60m Regional Enterprise Development Fund launched in 2017.
  • Start-ups: EI will deliver 180 to 200 new start-up enterprises with strong growth and export potential.

 IDA Ireland @ c. €137m

  • IDA Ireland's 2018 capital budget will enable it to continue to deliver on its investment and job creation targets as set out in its five year strategy, Winning Foreign Direct Investment 2015-2019. 
  • The Agency's allocation will be used to support FDI clients through employment grants, training grants and physical infrastructure. 
  • The 'Winning' strategy targets the creation of 80,000 new jobs and 30-40% increased investment in each region by 2019. At the end of 2016 IDA supported client companies employed more than 199,000 people in Ireland.
  • By the end of 2018 the level of employment in IDA supported clients should grow beyond 210,000 jobs. 
  • In support of its goal to increase regional investment, IDA Ireland is investing in a Regional Property Programme over a five year period to ensure that there is sufficient availability of utility intensive Strategic Sites, quality Business Parks and Advance Building Solutions to attract investment to the Regions.
  • The 2018 Capital allocation will enable IDA to continue this programme of advance builds by progressing 6 projects in Galway, Waterford, Athlone, Carlow, Dundalk and Limerick. The allocation for next year will also allow for vital investment in IDA’s portfolio of Business Parks around the country. 

Local Enterprise Offices @ c.€22.5m 

With the same level of capital allocation as 2017, the LEOs will:

  • Continue to support over 6,000 micro enterprises employing more than 34,000 people
  • Support the creation of over 7,500 new jobs (gross) next year.
  • Provide training to more than 25,000 participants and more than 10,000 mentoring assignments for small local businesses.
  • Promote a start-up culture among 1,000 young people through the IBYE programme.
  • Continue to roll out new Lean, Export and Growth programmes for existing clients to address the challenges of Brexit and to grow and maintain jobs. 

Inter-Trade Ireland @ c. €5.7m 

It is essential that we continue to support the North South Peace Process by maintaining Capital funding to InterTrade Ireland, (ITI) the Cross Border body. 

  • Last year total number of jobs created/maintained was 2,339, they supported 79 first time innovators and 88 first time exporters.
  • 2,400 companies engaged with its services to assist SMEs to develop cross border trade and capacity building.
  • ITI will continue that level of provision with the same level of capital funding for 2018.
  • With the advent of BREXIT, ITI is uniquely placed to assist companies that will be adversely impacted by the UK departure from the EU. Their remit dovetails with the necessity to assist companies in the border region so adequate capital funding for this work is essential.   

Research, Development & Innovation

Science Foundation Ireland @ c €166.75m [ Up €4.25m]

  • Continued support for 17 world leading SFI Research Centres that focus on strategically important areas of research for Ireland.   These Research Centres link scientists and engineers across academia and industry and to date have engaged with almost 400 industry partners.  
  • Continued support for over 4,200 top class research personnel across the country who are involved in over 1,600 industry collaborations spanning approx. 900 distinct companies (400 MNCs, 491 SMEs)
  • Continued support for over 2,000 international collaborations across more than 60 countries across the globe.
  • SFI supported researchers typically leveraging external (non-Exchequer) research funding in excess of €125m+ per annum, from external sources such as the EU and industry. Off a 167m capital allocation this equates to an effective yield in external funding leveraged of 75 cent per each €1 capital investment made by SFI every year.

Enterprise Ireland (RDI) @ c. €122m

Further scale up of In-Company RD&I by harnessing a combination of national and international in-company RDI funding:

  • through a vastly improved and responsive Enterprise Ireland In-Company RD&I Toolkit to include funding for Business Innovation, Agile Development and IP protection
  • Drive access to new product opportunities from through European SpaceAgency contracts (see below); and Securing international RD&I Funding from the EU “Horizon 2020” SME Instrument (€15m). 
  • Extend companies’ innovation to deliver approximately 1,000 industrial innovationprojects for companies to help in their competitiveness, diversification product/service, diversification and access to global markets beyond the U.K and market shocks such as Brexit.
  • New Company Creation – EI to support at least 180 new and early start-ups, including 90 Competitive Start Ups and 90 High Potential Start-Ups.
  • EIs support to start-ups, will involve the development of 130 new Entrepreneurs via the New Frontiers programme.
  • Through EI's R&D supports, Irish industry will compete and win in EU 2020 research funding mechanisms as part of Government's overall target of securing €1.25B by 2020 (€150M secured in 2017).

European Space Agency (ESA) @ c. €17.8m

  • €13 million secured in product development contracts for the highest tech Irish based companies from which next generation commercial products can be generated. (APJ 2018 target €13m; €12m in 2017)
  • Establishment of 5 new high performance entrant companies for ESA will be targeted
  • Establishment of 5 new companies through the ESA Business Incubation Centre (BIC) for Ireland will be targeted.
  • This will see support for new entrant company and start up activity, primarily through the ESA BIC support structure, and aligned with other Enterprise Ireland and ESA support systems.

Health & Safety Authority (HSA)  

An increase in the HSA 2018 pay budget will enable the Authority to prepare to meet the challenges its regulatory functions will face post Brexit. The Irish National Accreditation Body, part of the HSA, is already experiencing a greater demand for its services from UK notified bodies seeking to establish operations in a European Country. Another area in which Irish businesses could well be impacted by Brexit is in the area of registration and authorisation of chemicals for use in products. When the UK leaves the EU, some Irish companies may see their role change to that of manufacturers/importers if they continue to get supplies from the UK (being outside the EU) - which could result in higher obligations and costs on those companies.

 

  

[1] DPER Mid-Term Expenditure Report, July 2017

[2] EI - €1.3m; IDA - €700K; SFI - €400K; HSA - €400K and Department - €200K

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