Dáil debates

Thursday, 23 April 2020

2:50 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I will share time with Deputies Cowen, Calleary and Troy. I will vacate the Chamber as soon as I have completed my remarks. I convey my deepest sympathy to all of those families who have lost loved ones due to Covid-19 and to all of those families who have lost a loved one for whatever reason and as a result of whatever cause in recent weeks. It has been an incredibly tough time for everyone.

On the stability programme update published this week, it is fair to say that we have never seen a stability programme update or economic document prepared against a backdrop of such extraordinary uncertainty. The truth is that the future paths of our economy, of the public finances and of the global economy are inextricably linked to the future of this virus. If the virus lingers, the economic impact will also linger and recovery will be delayed. While the forecast makes for pretty grim reading, the document acknowledges that the reality could, potentially, be worse, although we hope it will not be. Added to all of the uncertainty surrounding the virus we have the outstanding questions on Brexit, which remain deeply unresolved.

The truth is that the ability of other countries to manage this virus will also have a direct economic impact on Ireland - even if we get to the point where we have contained its spread - because of the nature of our open and trading economy. In the midst of such uncertainty, it is understandable that the stability programme update provides only a two-year forecast as opposed to a five-year forecast horizon. We are truly in a period of uncharted economic territory. The overwhelming weight of economic opinion and international economic advice has been that governments must provide the necessary fiscal supports to their economies and, in particular, income supports to workers and businesses. They must also provide the working capital those businesses need to stay alive.

The Government has made significant efforts in this regard, supported by this House. During this phase of the crisis, sustaining these supports is vital. There are operational issues around different elements of those schemes, which we have spoken about before. For example, regarding the wage subsidy scheme, many firms are falling foul of not having had their February payroll return in by 15 March, in some cases for very good reason. Revenue is saying its hands are tied by the legislation and, while I know that raises more fundamental issues about this House and the Government, it is a real issue affecting many firms.

There are other issues that need urgent attention, for example, insurance. The scale of working capital support for SMEs is not yet at the level it needs to be at. To date, we have had no intervention in regard to guarantees or credit lines for larger firms above a turnover of €50 million, which will need access to those. The issue of commercial rents is causing very significant problems, the nature of forbearance offered by the banks is a significant issue, and we will soon need further announcements from Revenue on the deferral of certain payment obligations by taxpayers and companies. Over time, we will need to move to the preparation of a national economic recovery plan, which will need to apply sector by sector, with specific initiatives for areas such as tourism, retail, hospitality and construction, to name but a few.

Like the Minister, I am confident that our economy will recover. Over time, we will need to reduce what will be a very substantial deficit and we will need to be able to demonstrate a pathway to debt sustainability. Ultimately, that will be vital for Ireland. We do not want constant debate again in this House about bond yields and how much cash the NTMA is holding. However, those decisions are for another day. We need to sustain the supports that have been made available, improve them where necessary and work on the recovery of our economy. We need to help businesses refloat and get back up and running, and support workers in getting back to employment.


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