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MON, 15 FEB, 2021 - 14:42
ELAINE LOUGHLIN
The Pandemic Unemployment Payment (PUP) and Covid business supports will remain in place for many months to come before they are eventually phased out, the Minister for Public Expenditure has said.
Michael McGrath has said the Government will publish a plan on current pandemic supports along with the revised Covid roadmap next week to provide "a line of sight" to workers and businesses on when supports will be removed.
Asked whether the massive increase in spending on Covid measures both this year and last would have to be covered through an increase in taxes, he said he hoped the "bulk of the heavy lifting" will be done through increased spending when hospitality and retail reopens.
But he said a commission on taxation and welfare will be set up in the coming weeks and that will lay out options for the Government,
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Mr McGrath said: "The eventual withdrawal and tapering off of supports will have to be done in tandem with the public health environment within which we are all living."
However, the Fianna Fáil TD warned that this will have to be done in a "very careful and gradual way" adding that the Government is "conscious that for so many businesses the continuation of these supports is the very difference between mere survival and going under, and similarly for households in the form of Pandemic Unemployment Payment."
Mr McGrath would not be drawn on exactly how much longer financial supports will continue, but he said that a €5.5bn contingency and recovery fund has been budgeted for and a further €6.5bn has been directed to various Departments to invest in Covid measures.
"It is true to say that given the level of restrictions that we're all living under at the moment and the very significant economic impact that that is having we are now using up those resources, and that will continue over the next number of months, but we believe that it is the right thing to do."
Mr McGrath said €23bn has been added to the State's debt bringing it to €235bn since the start of the pandemic.
"We are availing, to the maximum extent possible, of the very favourable borrowing conditions, by refinancing our debt and availing of the longest possible maturity. So while our stock of debt is rising, the cost of servicing it is falling and the average interest rate is falling.
"It is our view that the reopening of the economy eventually when it's safe to do so and getting people back to work, will do the bulk of the heavy lifting when it comes to closing the budget deficit," he told RTÉ's News At One programme.
