Oireachtas Joint and Select Committees

Tuesday, 8 December 2020

Committee on Budgetary Oversight

Post-Budget Analysis: Irish Fiscal Advisory Council

Professor Michael McMahon:

The question of how to balance the issue of total capacity and how expenditure is directed towards specific types of capacity within health or any other part of the economy is a difficult one and certainly one on which I would defer to the health experts. I will give an analogy. One fact that is always rolled out when a little bit of snow falls and Dublin Airport or Heathrow Airport close is that the airport in Helsinki, which suffers far greater snowfall, has not closed in 30 years or something like that. It is a calculated decision. The infrastructure required to keep an airport open despite heavy snow is expensive. If it is only going to be rolled out for three days every two years, it is probably not the right thing to do whereas shutting down is sometimes the most prudent action even though it is disruptive at the time.

In the health sector, the decision is even more complicated than that. The questions that Covid has exposed relate to capacity in specific areas, in particular intensive care. We know that this is not an area that can be easily adjusted flexibly because specialist equipment, specialist hospital areas and specialist staff training are required.

Reverting to the earlier discussion, there are legitimate questions to be asked about what the right balance in spending is. I am not an expert on health spending, but in my own capacity, it is not obvious to me that, if we were having this conversation two years ago, we would be talking about expanding capacity in the health sector. It is not obvious to me that we would have expanded it in areas that Covid could then have drawn upon, for example, intensive care. It is a difficult matter and how we assess the probability of these events occurring and where we would put the extra capacity are important questions. Where other countries have handled this well, capacity and testing made the greatest initial difference in the crisis in the ability to stay open. For example, South Korea quickly got mass testing programmes up and running and was able to get results from tests quickly, and it was done in a cost-effective way. It meant that people were tested more frequently and outbreaks were more contained.

The Deputy is raising important questions. When a spending review takes place, the adult conversation that one of his colleagues referred to will have to take place about the right ways in which to manage these risks. We must view them as risks, not certainties.

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