Government is set to announce up to €3.5 billion in additional spending on Covid supports and economic stimulus in a bid to facilitate post-pandemic economic recovery.
However, the income and business support schemes that have been availed of by hundreds of thousands of people will be gradually wound down.
The size of the fund to be announced on Tuesday will put it on par with a conventional budget day of recent years, according to The Irish Times.
The announcements are intended to be the start of Government gradually leaving the huge borrowing the has marked the pandemic and moving to more sustainable public finances.
Recovery fund
The spending will include almost €1 billion in funding from the EU's economic recovery fund, with any commitments Government makes in terms of policy for this money closely monitored.
Climate action and education/training are expected to be big areas of investment for the EU funding.
This will include the first widespread national retrofitting programme. A new loan guarantee scheme will provide homeowners with low-interest loans to retrofit their homes.
There will also be provisions for a new major public transport project outside Dublin.
Meanwhile, the Department of Further and Higher Education is expected to receive €225 million in additional funding for projects.
This will include €40 million for Technological Universities and €70 million for research projects in the areas of climate action and digital infrastructure.
Climate action
The largest investments will go to State training agency Solas, with a lot of them going towards training schemes related to climate action.
Ministers met on Monday as the details of the plan were finalised, and it is understood the Pandemic Unemployment Payment (PUP) could be closed to new entrants by July.
A reduction in PUP rates is expected to start in September with further staggered reductions in the following months.
Those on the highest rate of €350 are expected to see their payment cut to €300, while those currently in receipt of €300 will have their payment cut to €250.
The lowest rate, currently €250, will come in line with the jobseekers’ allowance of €203.
The Emergency Wage Subsidy Scheme (EWSS) will be unchanged until the end of September.
Backlash
Sources in Government said the coalition is wary of public backlash and that the final version of the plan could still be “softened”.
The Government has previously insisted their will be no “cliff edge” in terms of pandemic supports.
One source told The Irish Times that the additional borrwing needed for a more gradual tapering would be small compared to the borrwing that has already been signed off on.
One source said: “For the sake of a couple of hundred million, we will play it safe.”
