Dáil debates

Thursday, 23 April 2020

2:35 pm

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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Before I begin, I would like to offer my condolences to those who have lost loved ones as a result of the Covid-19 pandemic. I pay tribute to our public servants, healthcare professionals, carers and shop workers. I acknowledge the remarkable solidarity shown by the overwhelming majority of Irish people towards their own families, friends and neighbours, but also towards strangers and the broader community as a whole, over recent weeks.

I welcome this opportunity to present the stability programme update to the House today. This is to allow Dáil Éireann an opportunity to debate the document before the Government formally submits the final version to the European authorities at the end of the month. We have kept our assessment to the current year and next year. There is simply too much uncertainty to do otherwise. We have presented scenarios in our presentation. The economic projections set out in the stability programme have been endorsed by the Irish Fiscal Advisory Council. This is a legal requirement.

The discussion of our public health and economic status is honest about both today but it is also honest about our future prospects and about what we can achieve. We can and will renew the economy of Ireland when we have recovered our public health but we are now in the midst of a severe recession, both globally and domestically. For Ireland, my Department is expecting gross domestic product to fall by 10.5% this year. This scenario rests on the assumption that the current containment measures remain in place for about three months – covering most of the second quarter of the year – and are incrementally eased thereafter. Recovery in the second half of the year is, accordingly, steady, while behavioural changes on the part of firms and households mean that the level of economic activity will clearly be below what would be the case had there been no pandemic. Therefore, we are now considering a U-shaped recovery.

It is evident to all in this House that jobs, and our people, have borne the brunt of an unprecedented economic decline. Our labour market has been turned on its head: transformed from a position of full employment to one where unemployment has risen at a completely unprecedented speed and scale. As highlighted yesterday, our unemployment rate could hit 22% in the second quarter of this year, having stood at just 5% as recently as January. Let me re-emphasise, however, that we can and will recover. Our economy can grow again next year, employment can grow, unemployment can fall, and our public finances can improve. This is because, as the experience relating to the previous financial crisis and great recession shows, our economy and jobs market are very resilient and have real underlying strengths that this crisis has not altered. In particular, the internationally traded sectors of our economy, such as those relating to technology, pharmaceuticals and medical devices, have shown themselves to be highly resilient during the current crisis. Moreover, we have entered recession because of a health crisis not because of imbalances in, or mismanagement of, the economy. In fact, none of the imbalances that characterised our economy previously - credit growth, borrowing from abroad through a balance of payments deficit - is evident at present. Household and large companies' balance sheets are, in many cases, in a much better position than a decade ago, at least at an aggregate level.

Once the pandemic is contained, we will be in a position to recover. The gradual recovery assumed in the second half of the year is projected to gain momentum next year, with the economy growing by 6% during 2021. We can expect economic activity to reach its pre-crisis level in 2022. A central focus of our recovery effort will be getting as many people back to work as the public health situation allows. We want to make the recovery a job-rich one -like the recovery from the financial crisis - and we will ensure that the right policies are put in place to deliver this in the context of a fundamentally different new normal in our economy. It is possible, for example, that we could see employment grow again next year, if we are successful in our public health efforts and if we see the global economic environment perform as we are currently projecting in the stability programme update. We could see an additional 115,000 jobs put back into homes and communities and that this will reduce the unemployment rate to below 10%. At 10% or even below that, it is still too high but it is a significant change from where we could be in the coming weeks. A strong and diverse jobs market has been the engine of our recent economic success. We are determined that this engine will once again be able to provide a job for everyone who wants one as we move into the post-Covid 19 era.

I will now update the House on the budgetary situation. In budgetary terms, the responsible manner in which our public finances were managed means that we are in a position to absorb a short-term and significant increase in borrowing. As the House knows, we achieved a surplus of 0.4% of national income last year. That would have accelerated considerably this year. We also set up a rainy day fund and we have been steadily reducing our debt ratio in recent years. That is the foundation of our ability to respond now.

For this year, a sharp deterioration in the public finances is now expected, with a general government deficit of approximately €23 billion, or 7.4% of national income. To be clear, this projection is based on assumptions about public health and what will happen with economies elsewhere and on policy decisions that have already been made. As such, it excludes decisions that could be made by this House, this Government and the Government yet to come. When those assumptions change from a policy point of view, or if the economic recovery is delayed, the deficit could change, too. It could be as large as indicated in the stability programme update, that being, €30 billion, or approximately 10% of our national income.

However, in the event that we recover in the way I have outlined - I have every confidence that we can when our public health allows us - it is feasible to foresee an economy that begins to recover, albeit at a pace in line with where we are with public health, this year and grows next year by approximately 6%, with important qualities in our labour market creating jobs. This in turn will create the ability to reduce the deficit next year.

This year's deficit arises from a combination of decisions that have been supported by the House. I wish to emphasise my appreciation for the way in which many of my colleagues in the Oireachtas have approached the decisions we have needed to make at speed. Measures have been taken to support homes, support our citizens who are facing a considerable loss of income and support firms in keeping jobs. That was entirely appropriate and is the way in which budgetary policy should be used. The very reason we run surpluses in good times is to ensure that we have the resources available to us at times such as this.

The House will be aware of the expenditure commitments that have been made to support income. The additional funding that has been provided is based on the projections that I have updated the House on previously and will in turn impact on our public finances. The debt-to-national income ratio is forecast at 69%, an increase of ten points. Meanwhile, our debt-to-GNI* is expected to increase to 125% for the year. To put those figures in context, the changes are in line with the international norm. Our budgetary position is very much in line with that of other advanced economies responding to the crisis. It will mean that, within the Stability and Growth Pact, it is likely that we will see the triggering of an excessive deficit procedure. However, we will share that with many other countries within the European Union.

In terms of repairing our public finances, economic recovery can drive most of the improvements. Growth will boost tax revenues and reduce unemployment, both of which will benefit the public finances. Furthermore, if the right decisions are made at international levels, we can avoid the pain of the last crisis.

This does not mean that this or a future Government will be able to do everything. Our deficit will have to be reduced, our national finances must return to a position of balance again. The daily debates about making choices within limited resources that existed before this crisis will endure and continue after the crisis has passed. What we value and prioritise and how we pay for it will continue to be a central debate of democratic politics.

We will be able to fund our deficit for this year and next. The situation is currently favourable. The National Treasury Management Agency, NTMA, had approximately €22 billion of cash on its balance sheet at the end of March. Part of this was used to refinance an €11 billion bond that matured this week. An additional bond matures in October and there are a small number of bilateral loans that mature this year.

The NTMA will also finance the Exchequer deficit of €15 billion, partly through cash balances and with new financing, which will be long and short-term in nature. The NTMA has announced its 2020 bond-funding range schedule and, importantly, we can borrow at less than 0.5% on ten-year debt at the moment. I also note that there are no bonds maturing for next year, which gives us important space. The State is in a strong position to fund the deficit that has developed. Equally, it will be essential that as our economy improves, so will our public finances.

Let me be unequivocal. Ireland will recover from this crisis. We will come out the other side of it. We have the economic and social capabilities that will pull our country through. This Government, the next Government and the Dáil can and will make decisions that will get our citizens back to work, that will help small businesses reopen and that will get trade flowing again. The State will be stronger, more resilient and have greater capacity, which I am sure will be needed, to meet the needs of our society as a result. That recovery will take time, determination and significant resources. It will involve difficult decisions but we can rebuild our economy. When we consider the alternatives to the measures we have undertaken we quickly realise the value of a caring society. The Government acted quickly and decisively in the interests of all of our people. This intent was supported and strengthened by the House. I have made the point on many occasions that I am the Minister for Finance of an economy within a society and not a society within an economy. As we have seen in recent weeks, Ireland is more than just an economy, it is a society. The stability programme update provides the backdrop against which decisions to protect and renew both will be made.

2:50 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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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.

2:55 pm

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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National solidarity has been key to our response to this crisis. Leadership, empathy and communication of the decision-making process on foot of public health expert advice has won public favour, understanding and appreciation. The curve is being flattened and, no doubt, many lives have been saved, despite our losses. I join others in commiserating with the families of all those who have died in recent weeks as a result of this crisis and beyond, as Deputy Michael McGrath has said. We have a duty to play our part in keeping this strong sense of common purpose, which requires trust in our political system and leadership. As we see the curve flattening, we also see the catastrophic impact on the economy, the public finances and jobs. Of course, this puts great pressure on that trust. It would appear, by my reckoning, that we are unfortunately reaching the legal limits associated with this Government's ability to respond to the crisis. In that vein, I ask the following questions in regard to public expenditure.

Under the Central Fund Act 1965, the Government is committed to spending four fifths or 80% of what was authorised in the Appropriation Act of the previous year before the Estimates are brought to and approved by Dáil Éireann. Some €54.6 billion was authorised in the Appropriation Act 2019 for 2019 expenditure. At a macro level, this would mean the Government has some €43.6 billion to spend before it needs to bring forward Estimates for 2020 to the Dáil for ratification. According to responses received from the Department of Public Expenditure and Reform, the Department of Employment Affairs and Social Protection will hit the 80% limit in June and, so, will be unauthorised to make further expenditures until an Estimate is voted on and passed by the Dáil. That being the case, has the Government sought and received legal advice, for example, as to whether Estimates can be brought to the Dáil under the current arrangements? We do not want a situation where Departments need to make adjustments to their individual budgets to prevent the Vote from reaching an 80% allocation.

On another issue, it is unclear when the pandemic unemployment payment expires. If it expires in May, as seems to be suggested in the health Act that was signed some weeks ago, then the Minister would, no doubt, need to sign an order to extend it. This needs to be clarified. When in law does an order need to be signed to extend the pandemic unemployment payment?

Further, under the provisions of that Act, that order needs to be laid before both Houses of the Oireachtas. It needs to be clarified then when this will take place. Moreover, it needs to be clarified whether it is possible to lay an order before the Seanad even though the Seanad is not constituted fully. My understanding is that the order must be put before both Houses of the Oireachtas and that each of the Houses has 21 sitting days to annul the order if each House so wishes. In terms of the key questions, when after the order is made must the order be laid before both Houses? Can such an order be laid before the Seanad if the Seanad is at that point in time not fully constituted as is currently the case?

In regard to capital expenditure, most if not all major capital projects have been halted during the course of the lockdown. Has a plan been put in place to get these projects up and running? What happens if deadlines are missed and the contractor incurs additional associated costs? I am thinking specifically of the children's hospital but also of many other projects. How do the relevant contracts deal with that? Will we have to spend yet more money on the children's hospital because of delays caused by the breakdown?

Those are pivotal questions that need to be answered in the context of the Government's legislative programme, or lack of it. It may have those tools in the recent Act but the Minister needs to clarify that to ensure that we can move on.

3:00 pm

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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We are having an economic discussion but we are having it in the context of a health emergency where 769 people, as of the latest figures, have passed away, including 250 in the North of the country. We have to think of their families and the questions they will have that need to be answered but, equally, we also have to have a debate about the consequences this is having on our economy. I am aware that discussions are taking place at EU level, and I note the German Chancellor's remarks that this is the biggest test of the EU. Let us hope that the EU is up to that test. The EU was set up in the context of the division of Europe after the Second World War. Now, if we are to face that biggest test, then it should challenge in the spirit of European co-operation and not some of the game-playing that seems to be going on at the moment. I wish the Minister well in that regard.

There are a number of specific areas we need. To get our country back up and running economically, the issue of testing arises. I know that is a matter for the Minister for Health but the Minister must also have an input into it in terms of the level of testing he has seen and on which he is getting advice to allow the economy of the country, and work, to return. There are specific issues on which I seek clarification. Those over the age of 66 who are not getting the pandemic payment are not looking for the full €350. They are people who were working up until the middle of March. They want their incomes to be brought up to the €350 and are willing and want to go back to work as soon as possible.

Every single sector is facing challenges but there are sectors, including our farming and fishing communities, that are facing a particular challenge. They are part of the response to this, and they have been hailed for their response, but they are facing massive pressures. They need clarity because they do not have control over their supplies. They do not have control over their production. That is in somebody else's hands.

When we look at the response in Northern Ireland, they are giving business grants to small businesses and to the hospitality sector. They are not giving low-cost loans. A low-cost loan at 4.5% is no such thing when we consider the current cost of funds. In terms of getting small businesses back up and running, some have already been told that they will not get facilities from their banks or an extension of their overdraft. If we are serious about getting businesses up and running, they will have to go into a low-cost loan scheme. That is what is being rolled out in Northern Ireland and also in Denmark, which we are looking at closely.

Yesterday, the Minister mentioned tapering the payments. Instead of tapering them can he link the reform of the payments to reforming the wage subsidy scheme because the more he reforms the wage subsidy scheme, the greater chance he has of keeping a link between employer and employee? If that link is strong and supported, there will be less need for the pandemic unemployment payment. I note all the changes the Minister has made. He has made some very good changes and responded but more changes are necessary in order to keep people in the scheme.

Tá fadhb mhór le cúrsaí Gaeltachta freisin. Entire parts of the economy of the Gaeltacht regions have been wiped out by the necessary decision not to proceed.

The acting Minister of State, Senator Kyne, is working on it, but early indications will have to be given about the supports that are available.

Finally, we acknowledge the massive work on the part of the Government and front-line workers, HSE workers and staff in retail and service operations throughout the country. We would be in a far worse position were it not for their efforts.

3:10 pm

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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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-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The Deputy must conclude.

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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I am finishing now. This must be done by a new Administration. We need a new Government, and we need it fast.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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We only have a certain amount of time. If Deputies speak for more than the allocated time, they will deprive others. I am sorry to be abrupt.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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Since the public health emergency began, sectors of our economy have had to be closed down to contain the spread of the virus, with economic activity brought to a standstill. As a result, thousands of workers have been laid off with households losing much, in some cases all, of their income. With trading brought to a halt thousands of businesses are struggling to survive. This week's stability programme update offered a stark warning of the impact Covid-19 has had, and will continue to have, on jobs and our economy unless the Government acts.

The report forecasts that our economy will not recover until 2022 at the earliest, with 220,000 jobs lost this year and a rate of unemployment next year that will be twice that which obtained in 2019. This pandemic has plunged our economy into a deep recession. The forecasts published this week were made on the basis of no further Government response. That means the length and depth of the recession are not yet set in stone. It will depend on the success of our public health response and on the economic response of the Government. A severe downturn, long recession and cuts to living standards must be avoided. They can be avoided if the right decisions are made. The Government's response to this crisis must come in two stages, namely, containing the economic fallout now and building a recovery that rewards rather than punishes workers and families.

First however, just as we seek to contain the spread of the virus, we must move quickly to contain the economic damage it has caused. Last month, on 23 March, I wrote to the Minister for Finance outlining Sinn Féin's proposals for an immediate response to the crisis. They were based on the principles of acting fast and doing whatever it takes to protect incomes, to support businesses and to prepare for economic recovery. Among the measures we outlined was an income support scheme that would subsidise 100% of workers' net weekly pay up to a maximum of €525 per week. The wage subsidy scheme that was rolled out by the Government later that month fell short of these proposals in a number of areas. Employers were only required to pay 70% of employees' wages and workers with weekly take-home pay of less than €500 were receiving less than they would on the Covid-19 pandemic unemployment payment. This gap led to a reduced uptake in the scheme. I welcome the fact that the minimum payment of €350 was introduced for employees with previous net pay of between €412 and €500 per week, but anomalies still remain in the scheme. A full-time worker on the minimum wage will receive less than €310 under the scheme, which is €40 less than the pandemic unemployment payment. Until this is addressed, fewer workers and employers will sign up to the scheme, increasing unemployment once we reach the other side of the emergency. The longer the relationship between worker and employer is broken, the more likely it is to remain permanently severed. The numbers speak for themselves. More than twice as many payments are being made through the pandemic unemployment payment than through the temporary wage subsidy scheme, and this needs to be reversed. Already we hear of Government preparing to taper off or cut these supports for people who have become unemployed and whose wages are currently being supported. To be clear, when the Department of Finance projects that as a result of this pandemic 220,000 people will still be unemployed at the end of this year, there is no way we should even be talking about reducing supports for these vulnerable individuals at this time. If anything, the crisis has shown us that our social protection system was not fit for purpose. This is not the time to cut income supports. It is an opportunity to rebuild a social protection system that provides adequacy and provides households with a floor beneath which no one can fall.

At a time of national emergency and with so many households in financial difficulty as a result of job losses, it is essential that all institutions play their role. This must include banks and the insurance industry but so far, this has not been the case. On 23 March, the Government and the five retail banks announced a three-month payment break for mortgage holders affected by the crisis. The Minister for Finance claimed that these actions provided real support for those most affected by Covid-19. The reality is very different. What is being offered by banks is not a break but a deferral, which comes at a very hefty price. I will give one example for the Minister. I spoke with one individual who is a customer of Permanent TSB, a bank owned by the Minister for Finance, Deputy Donohoe, on behalf of the people of the State. The person, a mortgage holder, applied for a three-month mortgage break. The bank replied to the customer that he would pay more interest over the term of the mortgage than if he did not avail of the payment break. Permanent TSB made clear to this customer that the change in the cost of the credit as a result of the payment break would be €7,739. This is the Covid-19 penalty that Permanent TSB, a State-owned bank, is imposing on an individual who is finding it tough at this time, along with many others who have lost their jobs and seen their household incomes destroyed by this crisis. They are being penalised by banks with additional debt as a result of this emergency. It is unacceptable. The interest should be waived during the period of the emergency for those who are unable to pay their mortgages or debts. These people should not be re-profiled with additional interest applied. I put it to the Minister that it can be done. It has been done by banks in other jurisdictions, including in European jurisdictions. This caretaker Government must demand action for the same from Irish retail banks, particularly those banks we either own or where we have major shareholdings. The Minister can start next Wednesday at the annual general meeting of AIB by demanding that it does the right thing.

Let me also make clear that there are major issues around the insurance industry. Despite calls by the Central Bank for the insurance industry to offer rebates to customers, the insurers are refusing to do so. They are still refusing to offer premium reductions or rebates to motorists despite a sharp decline in cars on the roads and in the numbers of claims being made.

For businesses the problems go much deeper than that and are no less challenging. As thousands of small businesses are battling for survival, insurance companies are determined to make that battle harder by refusing to pay out for business interruption despite this being included in black and white in insurance contracts. On 26 March, and again last week, I stood in this Chamber and raised the issue of FBD Insurance. Despite that insurance company giving written assurances to businesses that their policies would cover interruptions arising from an outbreak of Covid-19, it is now failing to pay out, forcing individuals to take it to court. We need to step in and to ensure that the Central Bank does as I have requested and audits the way in which insurance companies are handling these claims.

As I have said repeatedly, it is a disgrace that the Minister has refused to sign into law legislation that was passed by the Dáil and the Seanad on 26 September last. This legislation offers additional protections for individuals and businesses with regard to insurance contracts. In some of the court cases of which I am aware, that legislation would have provided additional protection. The Minister should do the right thing. These Houses have passed that legislation. The Minister should sign the letter to allow it to take effect.

The challenges faced by businesses are very great. Large swathes of our economy are in lockdown. Cash flow problems are becoming more severe and debt is mounting. Businesses' survival is on the line. They require immediate liquidity supports if they are to survive to the other end of this public health emergency. The Government-provided supports to date have been inadequate. Existing supports such as the SME credit guarantee scheme and the Covid-19 working capital scheme not only require additional funding, but reform. The working capital scheme in place to provide short-term liquidity to businesses charges rates of up to 4.5% and is subject to the banks' own credit procedures. I have spoken to businesses and they are not applying for these loans. They do not want additional debt at this time. They need zero-interest loans. At a time when we are borrowing at negative interest rates on the international markets, that is the least we could do for our companies.

Last month my colleague, the Minister for Finance, Conor Murphy MLA, rolled out a series of business grant schemes in the North that provided £10,000 to eligible businesses impacted by the pandemic. On Tuesday he provided grants of £25,000 for affected SMEs in the hospitality, tourism and retail sectors. Together with a commercial rate holiday, rather than a deferral, for affected SMEs, the Government should provide similar short-term liquidity supports for businesses.

I am running out of time as I am sharing mine with others. There is a need for a sector-by-sector economic recovery. This should be funded by stimulus and ensure that we build the homes, create the jobs, deliver on universal healthcare, and transform our social insurance system. There is role for Europe to play in this. I have written to the Minister about our proposals in that regard. Let me be clear; there can be no return to the way in which both Fianna Fáil and Fine Gael dealt with the last crisis, which was to implement austerity which deepens and lengthens the recession. We need to invest our way out. We need to use this opportunity to build social networks and safety nets for our people and citizens.

3:25 pm

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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The Covid-19 crisis has caused a major economic shock. Hundreds of thousands of workers have lost their jobs and many businesses are struggling to stay afloat and face an uncertain future. We need an economic and social plan for the here and now. We also need a plan for when we start to emerge from this crisis - which we will - and we have to get it right. We have choices to make and we must make the right ones in the time ahead. We cannot repeat the mistakes of the past. The Minister's Government cannot rule out or dismiss solutions previously rejected as politically impossible. A return to austerity is not the answer. We need a stimulus package that creates jobs by investing in housing and infrastructure and which also provides decent healthcare, a roof over people's heads, and decent work and pay. We need balanced regional development and sectoral recovery plans for sectors that will be deeply hit by this crisis. We also need to challenge those profiteering from this crisis, including the banks and the insurance industry.

Austerity, emigration and building an economy on low pay and precarious work can no longer be part of the solution. They are the failures of the past. Previous Fianna Fáil and Fine Gael governments before, during and after the last economic crash cut the minimum wage and income supports for lone parents, to give two examples. They saw emigration as a release valve and solution.

What we now need is a living wage for all, not some vague aspiration to achieve this. We need a real living wage in the here and now for workers. We also need a bailout for workers and families.

I also want to applaud all of our front-line workers. However, the front-line workers of today cannot be the forgotten workers of tomorrow. Many of the front-line workers in retail are on low pay, have if-and-when contracts and are victims of precarious work. We need to end all of that and end the hollowing out of our public services. We have a clear choice; we can continue with the low road chosen in the past of building an economy based on low pay and precarious work or we can take the high road and build an economy based on decent work, decent pay and decent public services. The choices we make will determine how long this economic recession lasts. If we make the right choices and put proper supports in place for workers and families, we will come out of this crisis an awful lot quicker.

3:35 pm

Photo of Thomas GouldThomas Gould (Cork North Central, Sinn Fein)
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I am really honoured to stand here today for my first address to the House. I am the first person from Knocknaheeny in Cork, a community that I am proud to represent and where my family is proud to live, to do so. I want to thank everyone who supported me on my journey through politics and in the recent election including party members and supporters, my family, friends and club, as well as the people of Cork North-Central who voted for me. I particularly want to thank my wife Michelle and our daughters, Aoife and Orlaith, my two sisters, Sharon and Noreen and especially my father Tony, who is a great man and a brilliant mentor. Unfortunately my mother passed away 27 years ago but I know that she would have been really proud to have her only son elected as a TD. I want to sincerely thank everyone who voted for me and I mean that from the bottom of my heart. The people of Cork North-Central have been neglected and abandoned for far too long. There is a lack of infrastructure, including the northern ring-road and hospitals, as well as a housing and health crisis but I will do everything in my power to fight for the constituents of Cork North-Central whether they are in the city or the county, on the north or the south side.

Today I have a question for the Minister from the people of Cork North-Central about the Debenhams workers. Has either the Minister for Finance or the Minister for Business, Enterprise and Innovation contacted Debenhams Ireland to ask it to reopen its stores at the appropriate time and to keep its workers in employment? Debenhams has announced an initiative in the UK which will see it reopen the vast majority of its stores and keep its staff in work. If Debenhams refuses to reopen its stores here then it must guarantee its workers the redundancy payments to which they are entitled. It must negotiate with the unions on a fair and proper redundancy package. If Debenhams gets away with what it is doing now, it will set a precedent and my worry is that I will be in this Chamber speaking on behalf of thousands, if not tens of thousands of other workers-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Thank you Deputy.

Photo of Thomas GouldThomas Gould (Cork North Central, Sinn Fein)
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I beg the Chairman's indulgence and will conclude on this. The Debenhams workers have been treated terribly. It is time for this Government and the Minister for Finance to tell Debenhams and all other employers that workers will not be collateral damage in this crisis.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I am sorry to interrupt but if we do not stick to the time, other people will be deprived of the opportunity to speak.

Photo of Thomas GouldThomas Gould (Cork North Central, Sinn Fein)
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I appreciate that.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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The Green Party is next with Deputy Leddin.

Photo of Brian LeddinBrian Leddin (Limerick City, Green Party)
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It is our duty as parliamentarians to not only keep our citizens safe during the immediate crisis, but to ensure that we plan for the future. The Irish people have never lost faith in their future and that of Ireland. It is at our toughest times that we must hold onto and safeguard this faith in our future. As a nation we have endured hardships but we have prevailed and will do so again. It is with this faith that I address this House.

The framework for recovery already exists in Ireland. We already have the resilience that will be required.

What we need from the State and what we as Deputies must ask of the State is to support our communities. We must place faith in our communities and remember, Ní neart go chur le chéile, there is no strength without unity: we are in this together. It is the duty of this House to ensure that the recovery, when it comes, brings about prosperity for every corner of Ireland. With leadership, foresight and honest application of hard effort, this Dáil can guide Ireland through these dark days. With a unity of purpose and trust in the highest principles of public office, those of duty and service, we can achieve a balanced recovery for our nation. I firmly believe that this recovery can take route through following green principles. The Green Party's policies are integral to achieving a fair and prosperous society for all.

In Thomas Kinsella's translation of The Táin, Nes asks, "What is the present hour lucky for?". What can we say when we are asked the same question now? How can we answer, except to say we used this challenge as an opportunity to show our abilities, our determination and our self-belief. The front-line heroes have responded magnificently to this crisis and we must trust in ourselves to carry this effort forward to recovery.

While the State has many avenues through which it can support its communities, I want to raise the issue of balanced regional development. This regional development can unlock the strength of Ireland's communities and ensure a fair recovery for our cities, towns and villages - a recovery that reaches all parts of our island. We have a duty to learn from our mistakes and apply new technologies, practices and knowledge. We need to enable people to work from every corner of Ireland to ensure every corner of Ireland can work. As we seek to rebuild our economy we can do it in a more balanced and beneficial way. Limerick, Cork, Waterford and Galway have immense potential in their own right and as leaders of their respective regions. We have a duty to ensure that each city has the infrastructure to be best poised to move from this devastating moment towards a bright future. One size, of course, does not fit all. Thankfully, our country is home to talented, knowledgeable experts, many of them young and well travelled who can unravel the diverse requirements of each city and region. The gifted generalists must learn to work with these highly educated, bright, multidisciplinary professionals, urbanists, transport planners, architects and designers. We must employ them at the great rebuilding task that is before us.

What then is the necessary infrastructure of the next recovery? What are our strengths that we can build on and what opportunities can we take advantage of? Now is a good time to take stock and think about the future. The public and private sectors have shown during this crisis that remote working can work. In many respects, among the unknown heroes of this period are the IT professionals who worked tirelessly to ensure whole industries could move from offices to homes. They have kept people working and we owe them our gratitude. Can we learn from this experience? Can we make it possible for more people to work remotely from all parts of Ireland in the future? I am hopeful that we have learned a new way of working that we can use to cut-down on long commutes and allow more people to work from rural communities. Where we need to expand our public service in the coming years, we should do so in a cost-efficient way, not necessarily by basing new public services in Dublin but by locating offices in cities that can benefit from economies of scale. Decentralisation was politicised in the past, but it can work well if we focus our efforts on our regional cities.

We are seeing so many inefficiencies in our capital owing to the cost of office space, housing and transport. We want to see Dublin thrive as an international city but to do that we need our regional cities to be more attractive in order to ease the pressure on Dublin. One of the reasons for my entering politics is that so many of my peers in Limerick saw no future for themselves in the city and so moved to Dublin or further afield. I believe we can do more to keep talent in the regions. We can develop regional cities that complement Dublin, to allow Dublin to become a more affordable city, to remove the traffic that is choking our capital's historic core and to give the city and its citizens the space to breathe.

We have seen how other European countries have recognised that regional cities can be significant drivers of national economic growth and exist and prosper on the European and global stage. We should have a similar ambition for Ireland.

I wish to talk about our towns and villages. Rural Ireland has been let down by poor planning practices. Once-bustling towns and villages have been undermined and gutted through haphazard, ill-thought-out policies. A viable and resilient rural economy cannot exist unless towns and villages are attractive places in which to live and work. We can ensure that our towns and villages are compact, walkable, vibrant and thriving once again. This can only happen if we, the State, provide the necessary infrastructure, whether broadband, shared workspaces or ambitious public realm projects that embrace the natural and historic characteristics of our towns. Our economy depends on efficient transportation to help people to access education and work. High-quality and reliable public transport in rural areas will connect our communities and bolster our rural economy. I wish to acknowledge the success of Local Link but we need to expand it significantly. We can and must increase speeds on our intercity rail network to ensure our regions are well connected. Cycling and walking must be a mainstay of transport policy so we can benefit from clean air, better health and safer streets. I do not want my generation to be the last to experience the joy of cycling to school.

Our capacity for investment will be limited as we emerge from this crisis but it is fundamentally important that we are able to meet our needs without compromising our children's ability to meet theirs. This applies to our economy as much as it does to our environment. So many of the false divisions in our society - between private and public, urban and rural, young and old - mean little as we all seek to work together. We face many challenging decisions in this House in the months to come. Whatever shape the recovery takes, it must be felt by all and in all parts of our country. Our economy must serve our communities and not that our communities only exist to serve the economy. We can end long commutes if we lead the way with community-strengthening infrastructure such as public transport. If we can revitalise communities such that people have the time and energy to get to know their neighbours and to coach their children's sports teams, we will have succeeded in leading a community-focused recovery. As we build a new society, we must ensure that care is extended to all, that as a community we can say we look out for and after one another. I have faith that together we can revitalise a community-based, considerate and loving Ireland.

I will finish by thanking the people of Limerick for their mandate and their support. As the rallying call of Patrick Sarsfield's Wild Geese went, when they fought on overseas battlefields for Ireland, "Cuimhnigh ar Luimneach". I will be here to ensure that Limerick is remembered. I will place myself at the disposal of all Limerick people to represent their interests and issues to the best of my ability.

3:55 pm

Photo of Alan KellyAlan Kelly (Tipperary, Labour)
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I congratulate my near neighbour on his maiden speech. The financial projections published by the Minister earlier this week, particularly the bleak outlook on job losses and the financial deficit in which we find ourselves, are very worrying. I know these are uncharted waters and that some of this involves guesstimates, but this is increasingly worrying given the devastating impacts it will have. Covid-19 has obviously had devastating impacts across the global economy and it will affect us in a proportionate way. Our near neighbours in the UK are facing their worst decline in centuries, and other countries are not faring much better. We had a Party of European Socialists, PES, group meeting today at which different proposals regarding help at a European level were discussed. While we know that the short-term outlook is bleak, the decisions the Minister, the Government, the future Government and this House take in the near future will shape our economy and our recovery.

There are essentially three questions that need to be asked. First, when and how do we open the economy and in what proportion? Second, how much will we ultimately spend? Who will pay? While the physical well-being of our citizens is paramount, we need to start giving some hope to people. I referenced this earlier today and last week. We need to start letting people, particularly those who are expecting to get back to work in the short term, know that there is a plan in place and that there is hope. Any plan that is published must give a loose timeline. I accept that it cannot be ultimately defined point by point but we need to give workers some peace of mind, allow our citizens to feel like they will be getting back to some form of normality and give employers a chance to figure out how they will create that normality. In other words, we cannot allow a vacuous space. We need to predict, hopefully, and allow for employers to adapt.

Much of what happens in the next few weeks will be trial and error. We may need to reimpose restrictions at some point if things change again, as they have done in other countries. The past six weeks have been devastating for businesses and employers. What we know for sure is that the rights of workers cannot be undermined at this time. Others have spoken about Debenhams and the manner in which workers have been treated. These workers have had no say in what comes next and are not allowed to fight for better terms in an exit strategy. That is not acceptable. It cannot be allowed to continue. Many Deputies from regional areas know that there have been many job losses at regional newspapers. Many of us here feel very strongly that this is being opportunistic because the companies are quite profitable. This example is similar to the one at Debenhams. It cannot be allowed to happen. We cannot allow circumstances to be used to treat workers in this way.

As we face into continuous restrictions, one area I want the Minister to concentrate on is the hospitality industry. As the Minister knows, I previously worked in Fáilte Ireland and Bord Fáilte. This industry will be affected in a different way compared to everyone else. We all know that many parts of this sector such entertainment, events and other forms of hospitality like pubs and restaurants will probably not be able to function for a significant period of time or in some cases, may be able to function in a short space of time but in a restricted way so we need particular supports and plans relating to that and I hope they are being worked on.

The way we really test the true extent of our solidarity in the State is how we extend our support to those who are most vulnerable. We know that many people are under enormous strain because of temporary lay offs along with people who have lost their jobs altogether. Unfortunately, just because we are in a pandemic does not mean that rent does not have to be paid, electricity bills do not have to be paid and living expenses do not exist. I think I was the first person in this Dáil to say, and I keep repeating it, that we need a plan for the crystallisation of rent debt. People are not able to pay their rent. It is not a case of just pushing it off, having rent caps and saying that people cannot be evicted. I know that if the Government extends it from three months to six months, as worthy as that is, it will extend this issue down the road. The fact is that rent debt will be crystallised. People will have serious debts so what is the plan to deal with it? Otherwise, at some point in time, landlords will evict them. Could the Minister tell us what his solutions are?

It was hard to listen this week to a minority of employers who said that hordes of employees were leaving and signing on for the Covid-19 payment. It reminded me of something from Victorian times and it was disgraceful. What I would like to find out from these employers is why they are paying their employees so little in the first place. Maybe by going through this bad period, we can respect and support the workers in retail, security and other sectors and get them a living wage, which they deserve because, ultimately, we are so dependent on them.

The Minister's projections and stability programme update predicted that unemployment will peak at 22% this year.

Going by those predictions, 200,000 people will be out of work. We need him to put forward comprehensive plans to address this. The Labour Party believes that the exceptional supports must continue and that we must not abandon workers and their families. We need a national conversation on this crisis and major decisions to be taken now on how we will manage its cost. Figures published by the Department of Finance indicate a deficit of €23 billion. We are in a space where it would be more affordable to borrow more and add to the national debt than to impose savage austerity on citizens. That is the belief of the Labour Party. It is clear that it is better to borrow and spend to protect the vulnerable than to cut off public spending too soon. The Minister has major decisions to make.

A solution also exists at EU level. The Union has made funds available. In particular, I wish to put forward the proposal of the Party of European Socialists, which was supported today by Pedro Sánchez, my Spanish colleague. He proposes the creation a €1.5 trillion economic recovery fund. The logic is simple: no member state can recover while other member states are in deep recession. We all need to recover together to enable us to restore our previous levels of trade. Collectively, the EU can borrow money at a cheaper rate than can countries such as Spain and Italy that are carrying higher debt and have been hardest hit by Covid-19. The proposal is for a once-off fund and it will not tie the EU into future collective debt-sharing. The collective borrowing of money will allow for a lower interest rate, which will ease the difficulties being faced by indebted countries. The Spanish proposal is a simple and effective one. It is also a simple and effective test of EU solidarity. The Minister should consider it.

My third question is the most crucial: who will end up paying for all of this? A price is currently being paid by those who have lost their jobs or businesses, particularly small businesses. Let me be clear that my party is, and always has been, opposed to unfairness. We must not have unfairness in this situation. In 2009, the Labour Party stood alone in opposing the bailout of the banks. Today, the banks are profitable and, until recently, bankers were looking for increased salaries while we are still paying for the bailout. In the same vein, the Labour Party will oppose any situation whereby low and middle-income families end up bearing the brunt of the cost of the pandemic while high earners and big corporations do not pay their fair share.

In the minute I have left, I wish to raise two issues. There is a lack of consistency in the approach of the banks in respect of mortgage payments. The Minister knows that as well as I do. It needs to come to a head. The banks should be brought in. Rather than the banks marching in to see the Minister, he needs to call them in to do what they said they would. In addition, we need some form of regulation by the Central Bank of lenders that fall outside this catchment because a number of lenders are behaving in an abhorrent way towards their borrowers who are struggling with mortgage repayments.

My final point is in respect of the insurance industry and the companies that have a business interruption clause in their insurance policy which is not being respected. I know of cases in which Covid-19 is mentioned in the policy but the insurance company is still not honouring the claims. This must also be brought to a head. Those watching these proceedings, the small and other businesses across Ireland that are struggling and have these policies deserve those policies to be honoured. In particular, I ask the Minister to start by addressing businesses which are struggling and badly need the business interruption clause in their policy to be honoured, as well as those whose policy specifically refers to Covid-19.

4:05 pm

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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None of the talk here today will count for anything and none of the projections will come to pass unless we get one thing right, namely, the question of tracing and testing. The entire strategy for addressing the pandemic in this country is to have a substantial testing and tracing regime in place such that a minimum of 15,000 people per day are tested. There has been talk about that for several weeks. Currently, only 5,000 people are being tested per day. None of the proposals being made today will matter or come to pass unless a substantial testing and tracing regime is put in place.

Talk about lifting the restrictions and getting back to any kind of normality is without any basis unless the testing is put in place. We know that if there is any relaxation of the lockdown, there is a high probability there will be a second wave of this pandemic. The only way to address and be prepared for that is to have a full test and trace regime in place. That is the number one priority we must all focus on and we are far from being in a position of having that regime fully up and running.

The stability programme update, SPU, announced by the Minister yesterday was unsurprising in many ways, given what we have come through in recent months. On behalf of the Social Democrats, I support the Government in the main in the action that has been taken. I certainly support the approach that has been taken on the health front in following the advice of the Chief Medical Officer, notwithstanding the serious issues in nursing homes which I will come back to later on with the Minister for Health. We also support the approach that has been taken to move quickly to protect people's incomes to the greatest extent possible. It is important, however, to point out that the kind of projections set out in the SPU yesterday envisage a three-month horizon for restrictions being lifted. There is no certainty about that. That brings us back to the question of testing and of our ability to test.

The other matter I am concerned about with the stark picture and the huge economic challenges that were set out yesterday is the Government's approach to funding this substantial deficit of a minimum of €23 billion this year. That could well come up to €30 billion or even €40 billion unless we get everything right in the health response. The question then arises of who will pay this substantial bill. I am quite concerned about the Minister's approach as set out today in his speech where he says we have sufficient reserves ourselves and that the NTMA has a lot of cash on hand and will be able to raise loans. While we recognise that interest rates are low at the moment, there is no way we should be put in a position where we are put at the mercy of the bond markets. My big fear is we will have a repeat of the kind of responses we had to the earlier housing and banking crisis of ten to 12 years ago. I fear that we will end up in a situation where, rather than having stimulus in our economy, we will be talking about retrenchment and austerity. When we look at what happened in the last recession, we see that the burden of that austerity fell on the shoulders of ordinary families. We are still living with the legacy of that austerity and people are still trying to recover from the huge hit they took in their lives and incomes during that period. I am not encouraged by what the Minister is saying about who and how we will pay for this enormous deficit that is facing us in the coming months and years.

I am concerned about the approach Ireland seems to be taking at EU level. We know the Taoiseach is joining with his counterparts in other European states this afternoon. The message coming from the Irish Government on the approach to European funding is quite ambivalent. On the one hand, the Government has signed the letter with the other eight states saying all of the European firepower should be made available to address this. On the other hand, the Government is sending the message that it will deal with this itself by raising its own loans. The implications of that are enormous for the Irish people if the Government goes down that road.

This is a crisis that is affecting every state across the eurozone. The response to that has to be a Europe-wide one. There is substantial economic and fiscal firepower in the EU and there is no reason Ireland should not be arguing as strongly as it possibly can for an EU response that concerns some kind of instrument that will ensure that people across Europe do not have to pay the price for this pandemic, over which they had no control whatsoever.

There is huge potential if we learn from what happened after the First World War, for example, when many loans were made available to Germany and the UK which were repayable over 100 years, making them effectively meaningless as it was in many ways free money. Money is currently available at zero or negative rates of interest. There is no reason an instrument cannot be put in place to ensure that European money is made available to member states to allow them to deal with the huge deficits which arise from the pandemic. That must be the approach. It is the only fair approach that can be taken. The future of the eurozone is at stake. We need to see substantial evidence of solidarity across the EU and to do that, we must recognise that the huge debt hanging over all the EU states must be mutualised. Any other response will inevitably lead Ireland into further years of austerity.

The rules for the wage subsidy scheme are overly strict. Its lack of flexibility is really hitting small business. Businesses have contacted the Minister on this. If they are even a day late in making their payroll returns they are refused the wage subsidy scheme, which makes no sense, and there is no appeals system in place either. The purpose of the scheme is to keep people attached to their employment but the strict operation of these rules works against the scheme's intention. I ask the Minister to re-examine this and address the issue.

There are other issues around the mortgage breaks which my colleague, Deputy Cian O'Callaghan, raised yesterday. He appealed for an extension to the mortgage repayment breaks from three to six months. It is really important that happens. Some 45,000 households are affected by that. In the main, those who applied for the three month break have not seen their circumstances improve, if anything they have disimproved. There is a very strong case to extend that to six months. There is a wider issue of why people in Ireland are paying 3% interest on their mortgages. If the Minister was serious about addressing this, he would ensure that our banks pass on the kind of favourable interest rates, which are practically 0%, to their mortgage customers. There is no reason mortgage holders in this country should be paying anything like 2% or 3% interest rates, it should be 1%. The Minister should be leading the way with the banks that are owned by the State. AIB should be forced to provide those kinds of mortgages.

The position on pandemic payments for those over 66 years is very unfair. There has been an appeal to the Minister that he ensure that people who have been working and are over 66 years can have their State pension topped up to the level of the pandemic payment of €350. It is only fair.

As I said, there is a definite need for the response to this situation to be a stimulus package rather than austerity. The pandemic has exposed huge frailties in how things are done in this country in terms of how we provide public services, including healthcare, nursing home care, access to affordable housing and childcare, all of which are inadequate. There is also low pay and poor working conditions.

4:15 pm

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Go raibh maith agat.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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The Minister has already thanked those at the coalface saving us, but the way to thank them properly is by ensuring they are properly paid.

4:20 pm

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Tá a fhios agam go bhfuil sé deacair ach tá an t-am srianta do chuile dhuine. Táim ag bogadh ar aghaidh go dtí People Before Profit agus Solidarity.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I am sharing time with Deputy Barry.

I welcome the fact that the Minister said the economic strategy should be led in the first instance by public health concerns but those words have to have meaning. They cannot just be a rhetorical commitment to putting public health first. In the immediate term, putting public health first means we have to have the resources to ramp up dramatically the testing and tracing regime. That will mean permanent increases in laboratory capacity, laboratory technicians and all the equipment and investment that is necessary to have a testing and tracing regime of the scale necessary to have some chance of moving back to normality. It cannot be temporary; it has to be permanent. That requires a lot of investment and there has to be a clear commitment to it. Professor Samuel McConkey said the nursing homes need 20% to 30% more staff. That has to be permanent. The nursing homes were understaffed, under-equipped and under-resourced. That has to be put right, and it has to be permanent.

A friend of mine, a nurse, put herself forward for the Be on Call for Ireland initiative four weeks ago but she still has not been placed. She is willing to work in nursing homes. Why is this not happening? I would hate to think it is because the Government is being careful about how many people it recruits in case it has to keep them employed at the other end of this crisis. That would not be good enough.

The same point applies to ICU capacity. We need permanent increases, probably a doubling at a minimum. The additional ICU capacity is temporary and once we restart the rest of the health service, it could potentially be eaten up. Therefore, we need permanent increases in ICU capacity. Even to bring us up to the European level, we have to double it. A key part of that is staff, not just equipment. One has to employ and train the staff, which has to be paid for. There has to be a commitment, if we are serious about public health concerns leading this, to permanent and dramatic increases in capacity and staffing in the health service and in the resources necessary to deliver the tracing and testing regime. That means health workers have to be paid. We could not recruit them over the past year or two because we were not paying them. My nurse friend asked me why she has not been recruited. Is it partly because it is being done by Cpl, meaning there is an agency factor and reluctance to recruit people and pay them properly as permanent new members of the health service? It all seems so obvious. There has to be an integrated health service. The lesson has to be an end to the two-tier system. The Taoiseach says of the public and private sides that there is no proof one is performing any better than the other, but there is absolutely clear evidence that there is a lack of coherence, consistency and integration in our health services. That can be achieved only by having a single, integrated public health service. The clue is in the phrase "public health". Profit has to go out if we are to transition back to where we were while living alongside Covid-19 and to protect ourselves against these things in future. That is a no-brainer. To me, it is beyond doubt.

Professor Samuel McConkey pointed out, in the document he produced weeks ago, that to do as I describe, there has to be social cohesion. To have social cohesion, he says, we need widespread social trust, and to achieve social trust we need a widespread perception of social equality. To achieve a perception of social equality, we need social equality.

Photo of Mick BarryMick Barry (Cork North Central, Solidarity)
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Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Exactly, socialism. One cannot have workers such as Debenhams workers thrown out by the private market, which is interested only in profit, and left on the scrapheap, particularly when the State has a stake in that.

That cannot be done. The alarm bells of austerity ring when I hear the Minister for Finance talking about divisive choices and tapering off Covid-19 payments. There can be no return to austerity if we are to have the social cohesion and trust necessary to transition out of this crisis and into the new social contract that we need in order to come out the other side of this crisis.

4:25 pm

Photo of Mick BarryMick Barry (Cork North Central, Solidarity)
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According to this morning's edition of The Irish Times,"There is growing concern in the Department of Finance that current unprecedented State supports are unsustainable in the medium term." I think that refers to the wage subsidy scheme but the particular subject of the article was the Covid-19 payment of €350. That payment is key for huge numbers of Irish people at the moment to put dinner on the table and keep a roof over their heads, not just for themselves but for their families. Without it they would go underneath the waves. I understand the decision is to be made in mid-June on whether to continue with the payment, how to continue with it and what happens next. That decision should be based on the needs of the population. No doubt the Minister will say it should be based on the needs of the population, while also taking into account the finances of the State. The needs of the population, however, are paramount. Can the State sustain that payment? Yes, it is possible if the right policies are followed. For example, there is €14.3 billion in a bank account that the European Commission awarded to the State in back taxes from Apple. The Government has refused to consider seriously the question of wealth taxes but that is a luxury that can no longer be afforded. The Sunday Timestells us there are ten individuals who have €53 billions' worth of personal wealth between them. We will have to have serious wealth taxes if we are to sustain the measures that are needed to sustain the population. Premature dismantling of those supports would meet with powerful opposition from ordinary people, all the more so when they can see that wealth is available within society but is untouched by the caretaker Government.

The report in TheIrish Timeswent on to state "Government sources were also tight-lipped about the prospects for the final instalment of the public sector pay deal". That is the 2% increase due to 300,000 workers and more at the start of October. I remind the Minister that included among those 300,000 public sector workers are nurses, ambulance personnel, firefighters, doctors, the teachers the Government is asking to supervise the leaving certificate examination and so on. The framework document that Fine Gael has put together with Fianna Fáil states there will be no tax increases in the lifetime of this Dáil but it should also say that the public sector pay increases agreed with those workers, including those front-line workers, will be respected.

There is furious international lobbying by big business for states to reopen their economies as quickly as possible. The attitude is summed up by the former chief executive officer of Wells Fargo who stated:

We'll gradually bring those people back and see what happens. Some of them will get sick, some may even die, I don't know, ... Do you want to take an economic risk or a health risk?

There is no room for that type of approach when it comes to reopening the economy. I have no doubt but that the Government is under a lot of pressure from lobbying by business interests in this respect. Working people want to see the economy reopen but terms and conditions apply. It has to be safe. The health and lives of working people have to come before business profits. Working people should decide when different workplaces and areas of the economy go back to work.

They should not be compelled to return to work against their wishes. Workers who are particularly at risk in terms of health should have the right to stay at home, not in poverty, but in full pay. When workplaces reopen, health and safety matters must be decided by the workers. On construction sites, for example, Covid-19 compliance officers should not be stooges of the management but should instead be democratically elected by the workers to decide what is safe for them.

4:30 pm

Photo of Denis NaughtenDenis Naughten (Roscommon-Galway, Independent)
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The economic commentary relating to Covid-19 can at best be described as depressing. There is no doubt that we, as a country and a people, are facing a monumental task in getting our economy, society and lives back again once we have pulled through the worst of this health emergency. We must also be conscious of the fact that, if we talk down confidence, we will further undermine our ability to recover and build new communities that are fairer for all. Even with dire economic warnings, we must provide hope. Hope has a powerful role to play during times of great uncertainty. We need a plan that gives hope to employers and workers, the self-employed and farmers, families, and old and young people. We need to make it clear that, whatever decision is made on lifting restrictions on 5 May, it will be taken not just on public health advice, but also on the basis of mental health and wellness and economic advice. We need to open our country, but we must do so responsibly.

As a first step, the Government should list specific businesses that can open under certain conditions. We must go further, though, and allow people to act in a responsible and mature manner themselves, that is, allowing those who can demonstrate social distancing to return to work. There are many who do not fall neatly into any category but who pose minimal risk because they, for example, work alone. There are other jobs where several employees can easily comply with social distancing rules. However, this should be conditional on them placing a yellow notice on public access points to their workplaces or businesses outlining exactly how they are complying with those rules. On that notice, they should also provide the public with a contact number to register a breach or complaint with, for example, a local authority, the Health and Safety Authority or a combination of State agencies. After such heroic efforts by every citizen in the State to stop the spread of the virus, we cannot allow a second wave of infection under any circumstance. If people breach the rules, they should be shut down immediately and face a stiff fine.

The Government must take on a leadership role and state that people returning to work or those meeting others outside of their families should cover their mouths and noses from this point on. I am referring to face coverings, not medical face masks, which we all acknowledge are in short supply.

We are conscious of the fact that it will not simply be a case of business as usual from next month and that we will have to find new ways of doing things. Social distancing will present challenges that are unique to each industry, profession and business. Now is the time for those people to start planning how they will be able to reopen safely when the time comes and what will become the new normal. Businesses and employers must, now rather than on 5 May, start considering their strategies for reopening. For example, Supermac's has already decided to reopen some of its restaurants where social distancing can be safely observed. Others must follow suit.

Rebuilding our economy must be done through a Covid-19 recovery plan, one that will take up to 1 million individuals off the unemployment register and into a new economy that works for our people rather than just works our people. The Finnish Government has put it well by calling it an economy of well-being. In such an economy, public resources are allocated for improving people's well-being. "Well-being" means that people are healthier and more innovative and productive, and they work and pay taxes.

We have a golden opportunity to reinvent our economy but we need a new decision maker and a new decision-making process to make this happen. The public needs leadership and this can only be provided by a stable Government with a clear mandate. This needs to happen quickly.

While the caretaker Government, working with public health officials, has brought us to this stage in the management of the Covid-19 pandemic, to progress to recovery mode and provide certainty for the people, the eight Regional Group Independent Deputies believe it is now imperative that we move from talking about Government formation to real and substantive talks on an actual programme for Government. In tandem with a new Government, I suggest that as part of the programme for Government we establish an independent Covid-19 recovery squad, made up of four innovative and experienced Irish men and women. These would be people who have stepped back from their roles as business people, entrepreneurs, financiers and academics, who want to give something back to our Republic that would last for generations to come. They would take a day or two a week to look at the merits of proposals that come not only through traditional policy avenues but from business people, innovators and our citizens. They would have a different perspective on providing solutions to age-old problems. As Deputies, we already receive innovative suggestions, such as, in the past, the Gathering in 2013. We now need a new way to assess these and a new way to look at and tackle the problems. The Covid-19 recovery squad could look at a proposal or solution, or put forward a call for solutions to a problem, and give their views directly to the Government.

The current end-of-term Government does not have the luxury of sitting back and waiting for a new Administration. It must, in the short term, act decisively. An immediate step must be to minimise the need for people physically to return to work by setting out key practical measures to support a national remote working strategy. There are huge opportunities for Ireland to become a global leader in remote working, which would attract new foreign direct investment to all regions and even to our villages. This could offer a real opportunity to deliver jobs for rural Ireland and breathe new life into our rural communities. The Government must set a target of transitioning to a post-Covid-19 economy where remote working makes up 30% of the workforce by 2030 in our public and private sectors, including IDA Ireland and Enterprise Ireland supported companies. The question has been answered for companies as to whether remote working can be done. The challenge now is to sustain it and ensure it is managed so that productivity and employee engagement is positive. This will start today with the Government delivering clear guidelines for employers and employees on remote working and simplifying the process of establishing remote working employment. A new approach must provide meaningful tax incentives for employees and employers. The feedback I have received on Revenue's e-working allowance is that it is unwieldy to apply for. This must be streamlined with immediate effect. We must look at the value of this incentive. In the example on Revenue's website, where an employee works from home for 90 days, the total amount claimable, if that person were to do so directly, amounts to €43. This will not incentivise the type of change that is now urgently needed.

While on the issue of regional job spread, we have to do our utmost to protect the jobs we already have in regional Ireland in agriculture, farming and tourism and in Bord na Móna and the ESB in midland counties. These sectors cannot wait for a new Government. We need to see action now to protect our family farms and our workers, some of whom need to be provided with alternative decent work options. We need directions from the Government now and not next year.

There is a long road ahead of us to recover from the effects of Covid-19. This is something we can do together as a nation.

We have tackled many problems in the past and with the right approach we can do so again. We need to encourage innovative solutions and find new ways to incorporate them into Government policy development. If we do this right, we can have a practical and profound effect on the future of our nation, the economy, the people and the generations to come. There is no doubt the road to recovery will be a long one. It is critical that we start to plan now for an Ireland living with, and an Ireland living after, Covid-19.

4:40 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Kildare South, Ceann Comhairle)
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I call Deputy O'Donoghue, who is sharing time with Deputy Michael Collins.

Photo of Richard O'DonoghueRichard O'Donoghue (Limerick County, Independent)
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We have heard from other speakers that broadband is a major issue in rural areas. I recently opened an office in Kilmallock, County Limerick. When I had broadband installed, four different people came to my office before they got it up and running. People who live within half a kilometre of me, who are on a main route between Charleville and Kilmallock, have been forced to go to work in 19 different businesses because they cannot get broadband at home. I have been sent around in circles in trying to get broadband through the services that are available to us. This affects 19 businesses. One employer has 60 people employed and he cannot open his doors because some of his employees cannot work remotely from home. These are the issues we are facing.

We listen to the Green manifesto on the need to bring down emissions. Broadband will bring down emissions in this country and it has been promised for years. If people are in a town or a city, or on a route between a town and a city, they can get broadband, but if they are any way off the beaten track, they cannot, unless they are working for the Government or the HSE. Everyone should get it because the service should be the same for everyone.

Members spoke about the five major banks, the five major banks that let everyone down, but none of the speakers mentioned the credit unions. All of the directors of the credit unions are volunteers. The credit unions are regulated by the Central Bank, like other institutions, but they are run by volunteers. I did not hear People Before Profit mention them, despite the fact they are volunteers. This is the only sector which came out, when people needed a three-month break from their payments, to tell them it would give them the three months and this would be added to the end of their loan, without interest being added on. Nevertheless, they were not mentioned with the five major banks.

I have written to the Government to ask if it has met with the credit unions but I have not yet received correspondence in reply. This is the only sector with directors who are volunteers and which is giving relief to members who have loans. The credit unions have rewritten their paperwork so that this happens at the end of the loan term so there are no repercussions.

Insurance companies have come out and insulted the people who have policies with them. I am told motor insurance customers have been offered €5 of a rebate, which is disgusting. These companies should be held to account. There is less traffic on the road and fewer accidents but, again, they insult us by doing this. Other insurance companies even mention Covid-19 on their policies, yet they want to bring people to court. They want to see whether companies can withstand Covid-19 and reopen, or whether they will close in the interim.

With regard to front-line services, there is a question I want answered. If people are in construction or a similar business they will have apprentices who are paid throughout their training.

I have brought up this issue previously. When this Covid-19 pandemic is brought under control our trainee nurses have to be paid while they train. We see the importance of our front-line services in a pandemic, as is the case now. They must have the same rights as any other trainee in this country, and they have to be paid. Our front-line service staff are essential, in the same way that our farming sector is essential. As I said earlier, farmers are contacting me on a daily basis who are trying to get work done for the harvest. They are being told by one office that their work is not essential but if they phone a certain party they are told that they are now available to do their work. Farmers keep food on our tables. Their work is essential. In terms of all farming work for the harvest season, a measure should now be implemented to ensure farmers have full rights to get materials to complete their work.

4:45 pm

Photo of Michael CollinsMichael Collins (Cork South West, Independent)
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As the Minister knows well, the tourism and hospitality sector has been decimated in the past number of weeks. As I said earlier, the Minister does not have a magic wand to resolve every issue but it is something we have to look into further. This sector is the largest indigenous employer within Ireland and it is currently devastated by business closures and significant job losses in Cork. Tourism makes a vital contribution to our economy. The future of many jobs now hangs in the balance as we do not know when hotels can reopen. Equally, when they do reopen, we do not know how our local domestic and international markets will respond in these uncertain times. The only certainty we have is that this market will take a long time to recover so we need to put safeguards in place to try to protect our people and their businesses across the bed and breakfast sector, restaurants, cafés and pubs.

Some of the measures could include waiving local authority rates and water charges for at least the next 12 months. I would also urge the Minister to consider removing the VAT rate for tourism until the industry recovers and, equally, reducing employers' PRSI. We know that cash flow will be a significant challenge and some Government grants will be needed. Interest free loans and arranging payment breaks on senior debt for at least 12 months would be very important.

For those over the age of 66, which I mentioned here this morning, the Minister is the Minister in charge. These are sole traders, many of them self-employed, who are paying income tax and yet are not entitled to the Covid-19 payment. It is astonishing that many people over the age of 66 who have had to continue working to top up their pensions and who are paying tax are not entitled to the Covid-19 payment. Why are the people over the age of 66 who worked hard all their lives and continue to work hard beyond the retirement age being penalised by not being given a Covid-19 payment or even the difference to make up the €350 payment, for which most of them have been honest enough to ask?

One of my constituents is a 68 year old woman. She is one of many who has worked all her life. She has bills to pay and other financial commitments. Those commitments have not changed because of Covid-19. Why can she not receive the difference in payment which would make up at least partially for the job she has lost and may never get back? Hers was only one of a vast number of calls we have received from people in the past few weeks. I presume every other Deputy has received them also. Our older people should not have to suffer any more than anyone else due to Covid-19. We are asking the Minister to reconsider topping up the payment to the full Covid-19 payment of €350 for people aged over 66 and who have pensions but who have lost their jobs due to Covid-19 and those who are self-employed or sole traders.

The same is the case with rural social workers who are currently playing a huge part on the front line trying to do essential work such as meals-on-wheels or whatever. Some families are earning €220. They have lost their outside farming income. They have lost their outside fishing income. They are simply asking if their payment could be made up to the €350. They should be shown some respect in these difficult times.

I refer to the issue of the Debenhams workers in the Covid-19 crisis. Two thousand of those workers nationally were informed by email on 9 April that the company's 11 stores in the Republic were not expected to reopen because of the Covid-19 pandemic, with the company liquidating its operations. The staff have kept this business going for the company and worked very hard. Debenhams staff have taken many cuts over the years and they are now devastated to be told via email that their jobs are gone. This is a shocking time to lose their jobs. Every assistance the State can give should be given to those workers at this time.

A sector people do not talk about much is the taxi and limousine business. I know one businessman in Kinsale whose taxi and limousine business, like those of many more, has fallen to zero due to Covid-19. The limousine would be more a service on the tourism side.

There is no tourism and no school transport and hotels and pubs are closed. The businesses to which I refer are seeking to apply for microfinance loans over three years. These loans are Government-backed through Microfinance Ireland. The businesses in question are on the verge of collapse. I fear that by the time the restrictions are lifted, they will no longer be in operation. They provide a vital service for the community and have built up great relationships locally. Some of them have been operating for 20 years and a number employ 15 to 20 people in the locality.

I have little time left. I wish to spend it discussing farming and fishing. Farmers are in dire circumstances at present, especially those in the beef sector. We need to see what aid is available. The inshore fishermen are pleading with me in call after call, day after day, to find out what is available to them. The larger trawlers are moored at the piers and there is no aid. They have the Covid-19 payment and nothing else. They owe millions and have employees. They need some type of aid and I would appreciate it if the Minister would address that.

4:55 pm

Photo of Michael McNamaraMichael McNamara (Clare, Independent)
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I listened to the Minister's statement and we spoke last week in the Chamber. I raised a number of issues then and I will return to some of them now because, unfortunately, I have not yet received answers. I appreciate that it is a difficult time, but I hope to receive those answers at some stage this week.

I wish to address tourism in particular. Obviously, there are many concerns for everyone in the tourism sector as to whether there will be a tourism sector. We will need clarity very quickly. I appreciate that some easing of restrictions will be announced on 5 May, but we do not know what that will be. The sooner clarity can be brought to bear in respect of the situation the better, and the better chance there is of salvaging some of the tourism season, whether that is confined to domestic tourism for people in Ireland who probably will not be going abroad and will holiday here or if international tourists will be coming here and, if so, in what circumstances. We definitely need some clarity on that.

Being from the mid-west, I have a particular interest in the aviation sector and a balanced aviation policy. Perhaps this crisis, which I do not wish to diminish in any way, might afford us an opportunity to somehow rebalance the aviation sector, particularly in view of the fact that 90% of the people who travel to Ireland, many of whom are tourists, come through one airport. Will that be possible in the medium term? Obviously, we will open up. Dublin Airport and Shannon Airport are open, but there will have to be a limit on the number of people travelling through a busy airport in order to reduce the number of people meeting each other. The Government should examine now whether the other State airports, particularly Shannon and Cork, can be utilised more if we are going to bring people into the country in order to ensure that they are not funnelled into one airport with the obvious risk of transmission that would entail and make it more diffuse, even on a temporary basis. If that is to happen, the number of transport links between all the centres, and particularly from Shannon and Cork to Dublin, would have to be expanded. I urge the Government to consider that now so we can seek to salvage a tourism season.

I have already addressed the Minister on the difficulty people involved in the tourism sector are encountering with regard to the Covid-19 payments. They were not in employment on the date in question so they are not entitled to the social welfare payment. The people who ordinarily would be employing them by now are also not entitled to claim it. The Minister outlined the number of persons who are in receipt of it and the difficulties that increasing the number would involve for the economy at this time. However, we must examine supports for the tourism sector because it is particularly affected both in terms of the lack of a season and also how it is going to kick start itself given that people who would ordinarily be in employment are not now and may or may not be available for employment.

That brings me to the next topic, namely, people over 66 years of age. Persons over 66 years of age who are self-employed or who run businesses are not entitled to the Covid-19 payment because they are in receipt of pensions. That is all well and good if one is trying to maintain oneself, but if one is trying to maintain a business and pay the overheads of a business, it gets difficult without any assistance. There is a large number of persons who are over 66 years and have a business. They are still incurring that cost so I urge the Minister to examine that.

We need to look at the issue of debts building up generally and not just for people over the age of 66. There are, for example, small retail outlets with standing charges for utilities and rent, which is still clocking up even if it is being deferred. There are also, perhaps, standing charges for rates. What is to happen with regard to rates? Will no rates be charged for the period? We still do not have clarity on that. Will the rates not be charged now or will they be pushed back? At the end of this crisis many businesses will look at what debts they have incurred during this period and they will ask if it is feasible to return. We must look at whether grants or some debt forgiveness can be given in order to make it worthwhile for those companies to come back.

With regard to agriculture, marts need to reopen quickly and there has to be aid to private storage considerably over and above that announced by the European Commission. I have put forward questions on this and I look forward to receiving answers.

5:05 pm

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I thank the Minister for Finance, Deputy Donohoe, for the efforts so far on the payments. I share the other speakers' concerns, which I will not repeat except in relation to the three month mortgage deferral and the interest rates and also the inconsistencies on the ground where people who are actually working are receiving less. I thank the Minister for his efforts on the payments, however, and it was the right thing to do.

I support Deputy Shortall's contribution on testing. We cannot talk about a recovery until we know exactly what we are dealing with. It seems to me that not enough testing is being done. I am no expert but I have listened to the experts. Even though there have been inconsistent messages from the experts, one consistent message has been the importance of testing. While 1 April can be a bad date, it worries me that in one of the briefing documents on 1 April we were told that sufficient test centres were open to meet current testing demand and lab capacity. Presumably the lab capacity was more the problem than demand because everybody would have come forward to be tested had they been encouraged. Now we have the lab capacity but we are still not meeting the testing capacity. I am worried that this is being done on a financial basis. I ask the Minister to tell me please it is not. Will the Minister tell me that he is following strict health guidelines? I suspect that it is being done based on the finance involved in testing so many people. This is a worry. I am trying to get my head around the inconsistencies. Four testing centres were opened in Galway but now we have only one. I understand there is a community hub in Merlin Park Hospital that is not being used to its full capacity. Yet, we have no idea of the extent of the virus in the community, depending on which expert one listens to. I have a difficulty with that and we certainly need more transparency and accurate information.

I have some general comments on the recovery. I welcome the Minister's point that it is not just an economy we talk about, that it is a society. I hope the Minister will go one step further to say that an economy must always serve the people and must serve all the people in the most equal way possible because in the long term it is the better way to deal with it. Quite clearly the question the Minister and all Members should be asking is what all of this will cost. The more important question is around the cost of not doing it and what costs have we now incurred because we failed to have a one-tier public health system. This is despite repeated warnings over the years from various doctors around the costs of not implementing that. These figures are readily to hand and the Minister is much better at figures than I am. I take the figures that I hear from various Departments on the cost of not implementing A Vision for Change. Extrapolating from Northern Ireland figures it is, I believe, more than €12 million but I understand it is much higher than that. There is a safer figure to be had on the cost of not doing anything about domestic violence, which costs the economy more than €2 billion each year. Let us ask what is the cost of not doing it and then ask what we need to do for a vision for society where we are all involved and where everyone can have the same choices and opportunities in life and let us work from that.

I looked at the framework document the Minister has produced and I despair really. Despite the preamble and the nice flowery language I do not see where anything has been learned. Consider public housing. There is absolutely no commitment around public housing on public land in view of the serious problem.

It is not stated anywhere. I see no statement in respect of the Irish language. A decision was made - rightly so and I understand why - to stop the summer colleges in the Gaeltachtaí operating. However, it was just a bare statement which showed absolutely no understanding of the role of the coláistí and the mná tí in the economy of all of the Gaeltachtaí or of how vulnerable the Irish language and the Gaeltachtaí are. An announcement was made without any context as to the 20-year action plan or the economic value of the Irish language.

The arts sector has been utterly ignored. I understand it has produced a comprehensive albeit brief document which contains seven points. I do not know if anyone has met with those in the sector, but from listening to the Minister for Culture, Heritage and the Gaeltacht, it is clear that she has not taken what they are saying on board. One of the points that jumps out is that those in the sector wish to be in a position to plan for next year.

My time is up. I have given out to others today so I will stick to my time.

5:15 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Kildare South, Ceann Comhairle)
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That completes our statements on the economy. This is obviously a matter to which we will be returning on several future occasions. We move now to No. 6, before which we will take a five-minute recess.

Sitting suspended at 4.01 p.m. and resumed at 4.06 p.m.