Gaming the system
Taken in the round, there wasn’t really anything to get too excited about in this year’s budget. Perhaps because there seemed very little that jumped out about the most pressing issue for many, namely housing and rents, it hasn’t generated too much enthusiasm or gripped too many imaginations.
No wonder Taoiseach Micháel Martin tempered expectations of what the budget would achieve, admitting that “this budget can’t do everything”, even as he claimed it sought “to protect people in respect of cost of living increases”. He added that there would be “modest” relief for workers “because there’s only so much we can do in this budgetary package”.
Perhaps modesty is a good sign when it comes to something as fundamental as the nation’s finances. Nevertheless, maybe there is some small sign of the government attempting to capture the post-Covid (or end stages of Covid) zeitgeist with the taxation measures directed at people working from home.
By allowing people to claim up to 30% of household bills on the days they work from home, the government is giving the fiscal seal of approval to hybrid working. It’s not a high stakes gamble as such, but it’s something.
Chambers Ireland highlighted the measure in its response to the budget. CEO Ian Talbot said that “remote work has an important role to play in creating more sustainable towns and cities by not limiting work to geography”.
Lockdown and the pandemic made remote working a reality for large numbers of people and it is hard to see how that particular genie can be put back in the bottle. Too many people were able to do their work remotely to the level demanded by their employers while enjoying a better quality of life. Any government seeking to force them back to the office would be on a hiding to nothing.
Not everyone was happy however. Sven Spollen Behrens, director of the Small Firms Association (SFA), complained that the budget did not do much “to lessen the load or to reduce the cost of doing business” for small companies. He cited the right to request remote work, along with pension auto enrolment and statutory sick pay, as cases in point.
The SFA argued it was an expensive budget for small businesses in many ways and would affect job creation and retention into 2022. Spollen Behrens described the budget as “underwhelming for small business” but said there were “some chinks of light, such as an increase in the earned income tax credit for the self employed, an expansion of the EIIS, no cliff edge on the EWSS and further supports for the Experience Economy”.
A new tax credit for the digital gaming sector of 32% on expenditure on projects up to €25 million was welcomed by technology business organisation, Technology Ireland, along with the changes to the EIIS. It also highlighted “the introduction of a new digital transition fund, which will help encourage the development and adoption of data analytics and AI”.
In addition, the government announced an additional €90 million for the Innovation Equity Fund (provided by the government, the European Investment Fund and the Ireland Strategic Investment Fund) to increase the availability of early stage funding for Irish SMEs.
Perhaps the ultimate ambition of this budget is that an Irish employee working remotely will be able to relax in his or her lunch break by playing a digital game developed in Ireland.