Jim O'Callaghan (Dublin Bay South, Fianna Fail) | Oireachtas source

We all need to recognise that recessions are a feature of all economies. It is unfortunately the case that that is so. We need to recognise that recessions occur when there is a decline in economic activity and a significant reduction in spending. There were many recessions in the 20th century, I am sure there were many recessions before the 20th century, but I suppose our ancestors at that time did not have the means or mechanisms to evaluate and appraise economic activity.

This country and the world went through a significant recession between 2007 and 2009. Such was the severity and breadth of that recession that it is referred to in academic research as the Great Recession. It had significant consequences for the world and this country. It just did not have significant economic consequences for this country; it also had significant social consequences some of which were devastating for the people who live here.

Since the recession between 2007 and 2009, there was a general expectation that we were going to meet another recession. Everyone assumed and hoped that the next recession would not be as severe but there was a recognition that there would be one. I recall that in 2016 there was a belief that because of turbulence in the Chinese markets that there was a recession coming. Then, I recall in 2018 there was concern about trade tensions between China and the US and that another recession might be coming. Although we all knew that another recession was coming, I do not think anyone in this House, or indeed anyone in the world, thought that the recession was going to be caused by a global pandemic, but that is the case with what we have to face and we must recognise that this recession is highly unusual and highly exceptional when one looks at the cause. Because it is a recession that is being caused by such an exceptional event, we need to recognise that it is different in a number of material respects. First, when one look at how recessions generally occur, there is usually a gradual decline in economic activity leading to the recession or, alternatively, there is a sudden event and after that there is a gradual decline in economic activity. Neither of these happened in this recession. Instead, we had an immediate and unpredictable, dramatic decline in economic activity. It occurred as a result of the outbreak of the pandemic, first in the Far East and then it moved over into Europe.

The second difference in this recession relates to how the it was caused, and we should not be embarrassed to say this, as a result of a deliberate act of government, not just our own Government but of governments around the world. As I said previously, those deliberate acts in closing down our economy were merited and justified at the time. We saw what was happening in the intensive care units of Italy and Spain. We were legitimately concerned that people in Ireland would be subjected to the same circumstances in our own intensive care units and that we would be left in the appalling position where people seeking intensive care could not be provided with it because our units were overrun, so we closed our economy. That was a deliberate act by us and that distinguishes this recession from previous recessions.

The third way this recession is different from previous recessions is that, in general, when one tries to get out of a recession, the most important thing to do is to try to invigorate consumer confidence to get people out spending again. One tries to instil confidence into the population because, in general, what a recession does is create a sense of financial insecurity among the citizens of a country. People in this country feel a great sense of financial insecurity, but what distinguishes this recession from previous recessions is that there is more than fear of financial insecurity, people are fearful for their health. That is why we need to recognise that there are some parts of the recovery to this recession that are imponderable to us at this stage. For instance, when one looks at businesses such as restaurants or small cafes, to what extent is the recovery of those businesses going to be dependent upon individuals having the confidence to go back into restaurants and pubs? That is something we do not know the answer to as of yet, but we will have to carefully appraise it.

Much of the academic research on the economic consequences of this pandemic is very uncertain at present. If one looks at any economic research, it will try to give three or four different examples, depending upon whether there is a severe outbreak of the disease in the future or whether it is manageable, as it is at present. In fairness to economists, and to everyone else, there is great uncertainty as to what the outcome will be. We know that the OECD has stated that the level of output in economies will decline by somewhere between one fifth and one quarter. If that happens, consumer spending is going to be down by one third. If that happens and it continues, I regret to say that we will find that this recession is going to be even more devastating than the recession of 2007 to 2009. However, it is not all bad news. Anyone who has looked at June's retail spending figures published by the CSO yesterday, which I am sure the Minister has done, will know they were up on June last year, so that is a positive outlook on the horizon.

It reveals that people are prepared to spend money in certain sectors but we have to recognise that other sectors, which involve the close congregation of people, that are going to be very affected by it.

The response of the Government to the pandemic has been very positive. Opposition Members can be critical but when one considers the response in general it has been positive and large. First and foremost, we have had the PUP, which was very beneficial to people who lost their jobs immediately. I welcome the fact that we are not eradicating the payment and that there is a recognition that it has to stay. Second, the TWSS has provided huge support to businesses and we need to continue with that scheme. Third, many grants are available for businesses to restart. I welcome the fact that commercial rates are going to be waived and individuals are going to be given that recognition. We need to recognise that we need to provide further supports for businesses into the future.

The State's objective should be to cushion the blow to businesses from this extraordinary recession and economic event. In short, the State can provide to businesses a parachute to help their descent and to ensure they can land safety when this pandemic passes through and dies out, as it presumably will. If we did not do that and had followed the approach taken around the world to the 2007 to 2009 recession we would find ourselves in a very appalling situation. That recession was dealt with by the Government deciding that debts had to be dealt with immediately. Around the world it was decided that the state would not intervene to try to help people get over very turbulent waters. If we had tried that this time, all of the businesses in the centre of this city and around the country would have gone to the wall in March and April. They would not have survived. The State, therefore, can commend itself on the fact that measures were put in place to ensure those businesses survived. They will hopefully survive into the future. We need to ensure we provide safe passage for those businesses from now through to the other side of the pandemic, where we will, hopefully, have a much safer economy.

However, we should not allow this pandemic to control and dominate our lives. It is a disease, and every generation produces diseases. It is a dangerous disease for vulnerable and elderly people and seems to affect different people in different ways but we need to recognise that we cannot allow it to control our lives. The best economic development that has occurred in recent times is the announcement that our children will fully return to school at the end of August. That is an enormous enhancement to our economy as well as being absolutely essential for our children's development. We also need to recognise that there is a lot of sense in what Deputy McNamara said recently. We are sending out the wrong message by being stuck in this enormous mausoleum. We need to get out of here. We need to get back to Leinster House, where we can work together which we are readily able to do. We should not give the impression to the public at large who are looking in that politicians are in some way a special species deserving of special protection.

The State has made a significant investment in businesses and it is the correct thing to do. We have made this big investment in businesses because we recognise the societal benefit of businesses and the employment they provide and the fact that there is more to an economy than the generation of profits. At some stage after this, those businesses will be able to walk fully on their own but they need to recognise that they also have a societal responsibility, just as the State does. For too long many businesses have seen their exclusive role as being the generation of profits for shareholders. The people managing the businesses try to maximise profits for shareholders, which they do very effectively, and as a result, they receive large rewards. Businesses need to recognise that they have greater societal responsibilities than simply maximising profits for their shareholders and that they have a responsibility to the economy and to society in the same way as the State recognises its responsibilities. That role is not fulfilled by businesses simply assuming and presenting their corporate responsibility duties and giving out small amounts to charities and local projects. They need to recognise that they need to get away from their devotion to the accumulation to of profits for shareholders. That is not a Marxist sentiment; that simply recognises the greater responsibility that businesses have above and beyond the generation of their own profits.

The legislation will be beneficial. It is a continuation of the proposals that were put in place initially. I welcome that section 2 will replace the TWSS with the EWSS. It is a very good scheme and we need to keep it going.

Sections 3 to 5, inclusive, deal with debt warehousing measures announced by the Revenue Commissioners back in March. I welcome them. Revenue need to adopt a more conciliatory approach to people in business, and indeed outside of it, who have found it very difficult to make tax payments due to the pandemic and economic collapse.

Section 6 amends the Taxes Consolidation Act 1997 and reduces the 3% interest rate Revenue can charge. Then there is the stay and spend tax credit, which will be beneficial. People have asked why we do not bring that in immediately so that people can go off on holidays in August and avail of it then. Most Members and most people in Ireland are going to spend their holidays in Ireland. We are going to have a good August and part of September holiday season here. It is a good idea to hold off on this scheme until October. I welcome also the €10,000 increase in the help-to-buy scheme tax rebate to €30,000.

Section 9 deals with the cycle-to-work scheme. One beneficial thing we have learned during the course of the lockdown is that lots of people should be cycling around this city. It is probably one of the best cities in Europe for cycling. It is flat, one can move quickly around it and there have been improvements in the cycling infrastructure. I hope those improvements will continue and we get a better cycling infrastructure but more people should be cycling. I am pleased that bicycle shops are sold out. We need to start encouraging more people in the cities to use bicycles as it is the most efficient way of getting around.

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