Michael D'Arcy (Fine Gael) | Oireachtas source

I thank the Minister of State for coming in. Today we are discussing a stimulus of between €7 billion and €7.5 billion. It is important for people to understand that each stimulus is subject to a timetable. It will either work or not, within that timetable. If it does not work, that means the money has run out and that we have not got back to a degree of normality.

On the last occasion I spoke here, I spoke about what was happening across the Atlantic, in the US. I spoke about the funding with which that jurisdiction was underpinning itself. Some $9 trillion is already committed and another $3 trillion may potentially be committed. To put that into context, this is more than 50% of its GDP. That is the scale of stimulus the US is committing. If, however, one looks at its position and why it is talking about additional stimulus, it is because it is still shedding jobs. The money that has been put in and the credit that has been made available has been used and it has still not had an impact on employment. The success of a stimulus is measured by whether it gets people back to work.

What has happened? The money has been used, the stimulus has been spent and still businesses need to cut costs. As Senator Casey will know, the biggest expense for most businesses is employees. That is what is happening. We have to be really careful and understand. The first portion of the stimulus was announced by the previous Administration. The follow-on announced by this Administration is very welcome. The Minister, Deputy Foley, announced funding for reopening of schools which, at €375 million, is a small amount of money compared with this. There will also be a third aspect, budget 2021. It is only ten or 12 weeks away. That will be the stimulus for 2021.

In response to Senator Casey, while it does have to go, the employment wage subsidy scheme will have to be extended beyond the dates currently committed to in budget 2021 because I do not see us getting out the door with regard to the pandemic and the virus without a safe vaccination programme being rolled out. As I have said on each occasion I have spoken, the virus will determine how long the stimulus will have to continue. There is no way around that.

We also have to be careful. I was hugely disappointed to hear Opposition parties calling this package miserly. That is incorrect language to use about the largest expenditure of funds in any one tranche by this State. To put it in the context of our European partners, we will have the second highest spend per capita in Europe. I say to the Sinn Féin Senators that this is not miserly. Sinn Féin is of the philosophy that it should knock and beat up everything to encourage as much bad publicity as possible. That is the wrong thing to do at a time of national emergency. It shows that Sinn Féin is not concerned with doing the right thing for Ireland, its people or its economy. Its Senators should reflect upon that.

There are also challenges with regard to the markets. People have said that the markets are solid and robust. Unfortunately, the markets are always robust until they are not. People can see what happens when they are not. Sentiment has an impact and a great deal of value can be wiped out over days or weeks, let alone months. The challenge facing the markets will depend on the virus and whether we listen to our experts, as we have done. The manipulations of populists will not manipulate the virus. The virus will continue to move. If we listen to the experts, as we have, we will get on top of this, as we have. The jurisdictions over the water on each side of us, both Britain and the US, have not done as well as we have. We have listened to our experts and we are on top of it.

I do not want to go through each aspect of the package and each amount committed but I welcome the taxation measures, to the value of €1 billion. I also welcome the rates waiver, which is essential. The cash flow of businesses has been greatly impacted. I speak to hoteliers in my county and some of their rates bills are €500,000 or €600,000 a year. That is not payable and will not be payable. The speeding up of capital works is very welcome.

I will raise a point on the credit guarantee scheme. It relates to the Strategic Banking Corporation of Ireland and investors participating in a business. Affairs analyses are being requested of investors in businesses. That will not wash. People will not give a detailed statement of all of their affairs just because they invest a sum of money in a business. I ask the Minister of State for clarity on that point. Will he ask his officials for a clear statement as to whether that is the case? It will not fly to ask investors for a statement of affairs listing everything they own.

The 2% reduction in the VAT rate. I do not want to be at odds with anyone else but there is a question as to how to best use this €440 million for the Irish economy. We may not fully agree but I believe reducing the 23% VAT rate to 21% is the right approach as every sector will benefit. I am easy as to how individual businesses choose to deal with the reduction. They may need to put that 2% back into their businesses. They may not pass on the 2% cut because the cash flow challenges are enormous.

I will also raise an aspect of the employment wage subsidy scheme, which will be crucial. Is the owner of a business allowed to claim the subsidy and to benefit from that money? In my experience of the owners of businesses, particularly the various types of SMEs, they tend to forego their salaries to keep their businesses going. It would be a mistake not to allow the owners of businesses to get the benefit of this scheme. I am also told that family members of owners are not allowed to claim the subsidy. It is important to have clarity on that matter because such a restriction would be a mistake.

My time is nearly up. We are looking at a €30 billion deficit for 2020. To put that into context, it is approximately equivalent to the total net amount given to the banking sector during the last crisis. That is the deficit for one year. I know we cannot say where we will be next year but we have to start thinking about it now. The deficit will be €30 billion or more this year. We need an indication of the sort of deficit we will run in 2021. If these schemes are not extended and if we do not continue to put capital into businesses to protect jobs, it will be irrelevant. I will finish where I started. There is a schedule for each stimulus measure. We have to continue with them because, if we do not, we may go from a recession to a depression. Nobody wants that.