FINANCE MINISTER PASCHAL Donohoe has warned about the consequences of a move to Level 4 or 5 restrictions, stressing that it could mean people losing their jobs “for the second time this year”.
Donohoe was speaking at the publication of the exchequer White Paper this afternoon and said the government is expecting to run a deficit of just over €21 billion this year.
He added that, if no budgetary changes were made in next week’s budget, the government would expect to run a deficit of €14.5 billion next year, declining to give specifics on what the actual projection is.
The Finance Minister emphasised that these projections are based on current public health guidance and that if the guidance was to change the deficit would “grow and grow and grow”
“That’s why in any decision that is made regarding the need to take more decisions to move up to Level 4 or to Level 5, we just need to be all aware of what the many repercussions of that are going to be,” he said.
Donohoe added that he is far more concerned about what Level 4 or 5 would mean for unemployment rather than for the budget deficit.
“The greatest concern that I would have would be the impact that would have on unemployment and the number of people who might lose a job for the second time in the year,” he said.
That’s my greatest concern in any decisions that we might yet make. If the public health guidance provides a very strong case for moving to Level 4 or Level 5 I’ll certainly consider that at that point. But will do so cognizant of what the job consequences of it could be later on in the year.
“And that’s the thing that concerns me very much for our society at the moment,” he added.
The government has previously estimated that the Social Protection spend this year is being forecast at more than €30 billion, but Minister for Public Expenditure and Reform Michael McGrath said this would grow if there was a move to Level 4 or Level 5.
“Just to give a sense of the immediate fiscal implications, back in the early phase of the pandemic, when we were in essential national lockdown, we had at the peak about 600,000 people on the PUP with a weekly cost of around €200 million,” McGrath said.
Next week’s budget
The Finance Minister declined to provide too many details on the plans for next week’s Budget, saying that there is “work to do” on the plans.
Over the past number of years, the Christmas bonus to social welfare recipients has been confirmed on Budget day, with McGrath also declining to say now whether this year’s double payment will be made.
“In relation to the Christmas bonus no final decision has been made on that issue at this point in time,” he said.
We are very conscious on the one hand that it has been a very difficult year for so many people, including many people who lost their jobs. But on the other hand, the Exchequer is in a very strained position as a result of all of the additional costs that we’ve had to incur.
“So, we will weigh up all of the different considerations in the next number of days and I would expect along with minister Heather Humphreys to confirm the position next week.”
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