Gerald Nash (Louth, Labour) | Oireachtas source

I will pick up from where Deputy O'Reilly left off. There has been some anxiety with how the Covid recognition payment has been managed. My colleague, Deputy Alan Kelly, first mooted the notion of a Covid recognition payment for all those who work in the health service in various roles. They worked very courageously, bravely and selflessly during the darkest days of the pandemic. They put themselves in harm's way. To the credit of the Minister and the Government they have introduced a scheme, although it has divided opinion. Inevitably, schemes such as this do. Sometimes it is difficult to know when and where to draw the line. Will the Minister confirm on the record in his response that the payment will be applied to all workers who work in sections 38 and 39 organisations and in residential disability services? I understand this is correct but there seems to be in my constituency among those I represent some confusion about this. I am pleased the scheme will not attract tax or USC. It is important the entire extent of the payment being made will find its way into the pockets of those healthcare workers who need it. It is an important recognition.

We are living through an incredible time in our history. Of that we have no doubt. We have experienced the most significant public health event of the past century with Covid-19, followed closely by war in Europe the nature of which we have not seen since the Second World War. We are living through an incredible period of history. History will record that the previous caretaker Government and this Government introduced phenomenal unprecedented measures to support our society and our economy through the darkest of times. History will also record the fact the House united in support of the measures proposed by the Minister and his colleagues, and that these measures have so effectively helped workers, businesses and society more general through an extraordinarily difficult period. It was important that the House and society united behind those measures in our battle against an unknown pandemic. I recall very well the long and late nights we had in here almost two years ago debating how we might approach Covid-19 and the types of supports we ought to introduce when we did not know the full extent of what we were dealing with. The country has by and large responded very well. That is to the credit of the Minister, the Government and everybody in the House.

Many of the supports introduced during Covid-19 were crucial in supporting jobs and businesses through a difficult period. The EWSS helped more than 719,000 employees and protected jobs, wages and businesses. It is not difficult to imagine where we would be if we did not have the extent of those supports available in our economy. With its continued presence for a period, there are a few things that need to be considered in the context of the wage subsidy scheme. I recall in previous months there were concerns about mortgage eligibility for those on the EWSS and tax liability issues for employees been paid through the EWSS and the TWSS. While the EWSS scheme is still operating, the Government must ensure these issues are dealt with and that employees who did not get to choose whether they were paid through the EWSS are not negatively impacted as a result from a tax point of view.

We have to hold onto the lessons we learned during the pandemic and not simply remove all vestiges of support all of a sudden. That could plunge businesses and employees back into a normal that never really worked in the first place. Since 2019, the Labour Party has been calling for a permanent form of wage subsidy scheme to be in our toolbox for dealing with crises in our economy. The EWSS worked by and large. It can continue to provide people with greater opportunities to train, upskill and grow.

As the reality of climate change worsens with each passing day, a permanent wage subsidy scheme with an appropriate retraining element could be a crucial tool in ensuring a just transition as we decarbonise our society. The Labour Party's own proposal for a permanent wage subsidy scheme would put the protection of workers, jobs and wages first by protecting State-subsidised employees from lay-offs and would ensure support was linked to prior earnings with compulsory employer top-ups. Importantly, the kinds of schemes we have been talking about would guarantee that each worker would have, for example, an individual retraining or upskilling plan to help improve productivity and prepare workers for potential new opportunities. We know only too well that, with the pace of change in our economy, many jobs we are familiar with now will be entirely obsolete in the not-too-distant future. That is a challenge facing our economy.

In October 2020, the OECD published a comparative report on Covid wage subsidy schemes. That study emphasised the need to "Promote training while on reduced working hours". This includes digital upskilling that could be tailored to individual needs and delivered remotely. Half of all Irish adults lack the digital skills needed to compete in the modern workplace, and in the two schemes we have had, there has not been any attempt to link wage support with in-work training and continuing professional development. When Covid threatened the economy, the Government made very important interventions. We have to learn our lessons with regard to how those wage subsidy schemes worked, how they could be placed on a more permanent footing, and how they could be tailored to meet some of the demands we will inevitably have in future.

My views on the question of the payment of dividends by firms that have benefited from the wage subsidy scheme have been on the record for a long time. The operation of certain schemes across the European Union essentially prohibited the payment of dividends to shareholders in companies benefiting from state largesse and support during the pandemic. We have consistently made the case that strict conditions for accessing cash support should have been introduced. These would have included a prohibition on the payment of dividends and bonuses by firms using the scheme and a prohibition on companies that operate from tax havens making use of the temporary wage subsidy scheme, TWSS, and employment wage subsidy scheme, EWSS.

As we know, it emerged late last year that, as we could have predicted, profitable multinational companies and profitable indigenous Irish companies that had received significant taxpayer support subsequently paid out millions in dividends to their shareholders. That was not illegal or unlawful. There was nothing in the legislation governing the wage subsidy schemes that prohibited it. However, that does not mean it sits well with me or with members of the public. Based on an approach I made to it, the Committee of Public Accounts has asked the Revenue Commissioners, the Minister's own Department and others for their views on this. It is important to establish those views, especially if we are to develop new wage subsidy schemes in the future to meet some of the challenges we will inevitably have in our economy.

Some very profitable companies that made use of the EWSS, thereby benefiting from State largesse, paid out dividends to shareholders while, in contrast, nearly half of all workers who availed of the TWSS have been hit with a double whammy of tax bills of up to €2,900 in addition to many seeing a significant cut to their pay packets. Last year, I called for these tax bills to be scrapped on a once-off basis and I am doing so again in light of the cost-of-living crisis we are facing. The Minister will recall that, in late 2020, the Government set aside considerable resources for a subsidy scheme to support tourism that went almost untapped. The resources were there to try to help people by means of scrapping those tax bills on a once-off basis but, unfortunately, Government chose not to do that.

I will now move on to the response to the cost-of-living crisis because it is important, when talking about all of the supports that were introduced to help combat the economic and social problems associated with the Covid-19 pandemic, to look again at the Government's response to the cost-of-living crisis. The Government acted very boldly and with ambition and courage in responding to Covid-19 but I do not believe as much courage has been targeted at the problem of the cost of living. There has not been as much innovative thinking. It seems we are back to normal and to an assumption that the market will resolve itself and that people will ultimately be fine. Notwithstanding the measures the Government has brought in, it is simply the case that people will have to suck it up and get through this as best as they can and that we will come out the other side.

In the context of the war in Ukraine, our principal concern is obviously for the people of Ukraine who are the victims of Vladimir Putin's illegal war and occupation of that sovereign nation. That should be our first concern, but Ireland and the Irish people are going to face very significant economic impacts and we need to be mindful of that. We already have an enormous challenge in respect of the cost of living, especially for low and middle-income workers. That is going to become even more complex in the coming period. We cannot anticipate precisely what is going to happen. Nobody can. However, we need to scenario plan at this time and to use the spectacular resources available to us because of the hard work of Irish workers, the nearly 2.5 million people who are at work. We need to target those resources where they are needed most. There needs to be some serious thinking from Government with regard to how to address those challenges.

I look forward to engaging later with the Minister on the financial resolution with a view to developing some alternative measures to assist workers and ordinary families through the worst of this crisis. We need to do everything we can to protect the living standards of the people at this very uncertain time. I will engage with the Minister constructively, as I always try to do and as will my Labour Party colleagues, over the coming period to try to develop solutions to those very serious challenges.

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