Thursday, 23 April 2020
Irish Economy: Statements
The IMF is predicting the worst global recession since the Great Depression. Earlier this week, the Minister outlined the stark effect of Covid-19 on our domestic economy. The policies deployed today will determine the pace of our economic recovery. I will focus briefly on the SME sector, a sector on which the Irish Exchequer is heavily dependent. First, I have raised the issue of business interruption insurance policies umpteen times. It is clear there are insurance companies that are ignorant of their responsibilities. We urgently need an independent arbitrator. We can use a reformed and adequately resourced financial ombudsman that can give an efficient, legally binding decision to the affected businesses. They need clarity and certainty, and they need that now.
The Government must explore access to trade credit. Without Government intervention post Covid-19 it will be extremely difficult for businesses to get trade credit. Suppliers will not have the confidence to supply their creditors and that will reduce the ability to trade normally again. Other EU states are considering trade credit schemes. As such schemes require EU approval, we must examine the position in respect of them now. Germany is leading the way and is currently awaiting EU approval.
The greatest risk with companies going out of business is that they will not open again. The wage subsidy scheme is helping businesses and is maintaining the link between the employer and employee. The Minister made some changes to the scheme but more are needed. It is wrong that tax-compliant, sustainable businesses are refused entry to this scheme if they are even a day late with their January and February returns. The Minister must direct the Revenue Commissioners to be flexible in this regard.
In the area of liquidity, almost everything the Government has offered so far is debt finance at commercial lending rates, with non-normal application criteria. This does not compare favourably internationally and it is not getting down to the businesses that need support. I ask the Minister to intervene. Much more must be done. A national recovery programme must be put in place-----