Govt urged to scrap pandemic bonus plan
The Government needs to scrap its plan for frontline pandemic bonus payments and a new bank holiday because it will burden future generations with increased debt, CEO of the Irish Small and Medium Business Association Neil McDonnell has said.
The call came as a prominent Limerick-based economics professor labelled pandemic bonuses as a “bad idea” and “a poor use of taxpayers funds”.
Speaking on RTE’s Morning Ireland, Stephen Kinsella, associate Professor of Economics at the University of Limerick, said: “If you think about the grand challenges that we have to solve – decarbonisation, climate change, homelessness – none of these are going to be addressed by giving people a voucher.
“Think about what the State could do with €1 billion.”
Minister for Public Expenditure Michael McGrath costed frontline pandemic bonuses at as much as €1 billion in the Dáil in recent weeks.
Vouchers of between €200 and €500 have been mooted by various political parties and feature in pre-budget speculation.
ISME has also called for unions to “say no” to increased calls for frontline pandemic bonuses.
With more sectors, including pharmacists, teachers, transport workers, retail staff and soldiers, seeking recognition payments for what they claim were Covid-19 frontline duties, Mr McDonnell said the trade union movement needs “the moral courage” to say the “bonus plans should not happen”.
He called on Government to abandon the plans.
“We are asking Minister Donohoe and Minister McGrath to call a halt to all this rather excited talk about €1 billion to say thanks to people. Just stop, do not make the problem any worse,” he said.
“There is somewhat of an air of unreality. When you think about the great recession that we all went through just over a decade ago, we went in to that recession with a national debt of €50 billion and within a few years that national debt had gone up to €200bn.
“In the last year and a bit, we have now added another €50bn of debt to that.
“The reality of this is that the people that are beating their breasts, and saying they are entitled to extra holidays … in reality they are never going to repay this debt and they are passing it to their children,” Mr McDonnell added.
He said that “people have lost the run of themselves” over bonus payments.
“It is just not worth the cost of labouring another enormous debt on the citizens of Ireland just to say thanks.
“It is incumbent on us all – including ourselves as a trade association in ISME – to say this should not pass and we should not react to the pandemic by simply bestowing a public holiday,” Mr McDonnell added.
The introduction of an additional bank holiday is also rejected by ISME because the cost would be carried by the private sector.
“The proposal to introduce a bank holiday – as some sort of means to express gratitude to people in the public service, while it’s well intentioned – is asking the private sector to carry the can for a cost that should be borne by government,” said Mr McDonnell.
“This is outsourcing to sectors of the economy that may be least able to afford it. And, while you can argue and make a sensible case for the introduction of a new bank holiday in Ireland, we don’t think that bringing in a bank holiday simply to commemorate or mark a pandemic is the wisest course of action,” he said.
Prof Kinsella said the cost of an additional bank holiday is bigger than the benefit.
“You shouldn’t do it. The cost to the private sector is going to be in the hundreds of millions and the benefits for one sector tourism are going to be in the tens of millions,” he said
A recent analysis by Fáilte Ireland showed an extra bank holiday this year could generate up to €20 million in tourism revenue.
Mr McDonnell said that some traders – mostly in tourism and hospitality – support the introduction of an additional bank holiday, but many others do not.
Minister for Public Expenditure and Reform Michael McGrath said the Government plans to put forward a proposal in the coming weeks that “appropriately and sensitively” recognises the efforts of frontline workers during the pandemic.
Speaking on the same programme, he said that while it is “challenging and complex”, the Government wants to acknowledge that over 5,000 people died due to Covid-19, as well as recognising the “extraordinary efforts of people in the economy and the public services in an inclusive and collaborative way”.
He said “we don’t want to adopt a divisive approach now, while recognising some people did go above and beyond and do deserve special recognition”.