Dáil Éireann Debate, Tuesday - 7 July 2020
192. Deputy Ged Nash asked the Minister for Finance the status of his plans to manage the public finances to ensure necessary investment in infrastructure and skills required to enhance competitiveness as outlined in the programme for Government; and if he will make a statement on the matter. [14588/20]
Amharc ar fhreagraThe Stability Programme Update, published in April, estimated a general government deficit of €23 - €30 billion in 2020. As I have said previously, it is entirely appropriate that Government runs a deficit and increases borrowing to support the economy in these unprecedented circumstances. However, borrowing at this scale cannot go on indefinitely and once circumstances allow, we must return the public finances to a sustainable path.
Looking ahead, fiscal policy is likely to continue to follow a three phased response as follows:
During phase one, the Government has taken swift action to introduce emergency measures aimed at protecting individuals and businesses during the initial period of uncertainty. Cumulative support provided by Government, so far, amounts to some €15.5 billion, or the equivalent nearly 8 per cent of GNI*. The level of support is exceptional and will be unwound as we continue to reopen our economy.
The main concern in phase two, the ‘recovery phase’, will be to get as many people back to work as quickly as possible. As set out in the Programme for Government, a number of initiatives will be set out to get business back on their feet, bring back confidence to consumers and kick start the economy. This will be done through a targeted, time-limited stimulus, with the primary focus on boosting employment. The Programme for Government also sets out the proposed Recovery Fund, a key pillar of which will be reskilling and retraining for those who have lost their jobs as a result of the pandemic and are unable to return to their previous employment.
Once the economy has recovered, fiscal policy will be required to pursue a credible path towards sustainability. Over the long-term, investment in infrastructure and skills depends on having the public finances on a solid footing.
