Budgeting for Brexit? (Budget 2020)

Oct 08, 2019
With the 31 October Brexit deadline just over three weeks away, it’s no surprise that Budget 2020 was dubbed the ‘Brexit Budget’. With the prospect of a no-deal Brexit looming large, the Minister has announced a contingency package of €1.2 billion (excluding EU funding) to respond to the challenges Brexit presents. 

However, as the Minister explicitly pointed out, if a no-deal Brexit does not occur, no additional funding will be secured. To quote directly from the Minister’s speech: “if we do not need it, we will not borrow it”. 

With €650 million to be made available to support the agriculture, tourism and enterprise sectors, there is an additional €500 million set aside from the ‘Rainy-Day fund’. The funding will be released in two waves, by priority:

First wave: targeting “most affected” businesses

€110 million will be deployed to support businesses of all sizes with a particular focus on food, manufacturing and internationally traded services. These businesses are referred to as “vulnerable but viable”.
In addition to the supports previously available for Brexit, new supports will also be made available in the form of a variety of grants, loans and equity investments, including:

• a €45 million Transition Fund;
• a €42 million Rescue and Restructuring Fund;
• an €8 million Transformation Fund for Food and Non-Food Businesses;
• €5 million extra for Micro Finance Ireland;
• €5 million for a Local Enterprise Offices Emergency Brexit Fund;
• €2 million extra for Intertrade Ireland; and
• €3 million extra for regulatory bodies.

Second wave: Agriculture prioritised 

In the event of a no-deal Brexit, an additional €110 million will be provided through the Department of Agriculture. The beef sector has been highlighted as the priority, with €85 million of promised support, followed by the fishing industry, with a €14 million allocation.

The cherry on top?

An additional €40 million of funding will be provided for the tourism sector from the €650 million contingency to help mitigate the impact of a no-deal Brexit (especially in the border counties), make Ireland more accessible from overseas markets and support activities for targeting key markets such as the UK, North America and continental Europe. The allocation of remaining €390 million will be determined closer to the time.

Furthermore, it seems there will be another €365 million provided for social protection expenditure and related schemes with a further €45 million made available to assist with the creation of new jobs and opportunities.