Business group Ibec is calling on the government to spend an additional €15bn as a first step towards rebooting the Irish economy following the Covid-19 pandemic.
The spending call forms part of a three-phase ‘Reboot and Reimagine’ plan devised by Ibec to help businesses recover from the pandemic.
The plan envisages a raft of phased government measures to be introduced over the first 100 days of a new government, by the end of 2020 and by the end of 2023.
Among the key recommendations are a €15bn reboot plan within the first 100 days of the new government and an increase of €25bn in the lifetime of the National Development Plan, through a combination of Exchequer, private and other finance.
Ibec’s plan is also calling for further measures such as low- or zero-cost loans, export credit insurance and extended state guaranteed loans.
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The plan also proposes that for every percentage point lost in growth in 2020 and 2021, the state should expand its primary deficit in kind.
Danny McCoy (pictured), CEO of Ibec, said that the economic response to date from the government has been impressive, particularly regarding income supports for workers.
“We are, however, only in the first phase of the crisis. While economic dislocation has been sudden, its full impact has not yet been felt and is likely to last for years. Disruption and change are unavoidable,” McCoy added.
The 240-page Ibec plan for economic recovery focuses on six thematic areas:
- Engagement and crisis management
- Fiscal policy and stimulus measures
- Getting people back to work
- Using the NDP to stimulate investment
- Seizing international opportunities and addressing Brexit challenges
- Reimagining a better Ireland
Ibec said that its own research is pointing to a very significant impact from the Covid-19 pandemic on businesses in the short and long term. Among the consequences will be a greater focus on remote working, online sales and technology, as well as fundamental changes to business models to ensure survival.
However, many businesses have reported to Ibec that they expect to reach pre-pandemic demand levels within a year of the easing of restrictions. “For those that are significantly adversely affected, and there are many, a key element will be providing sufficient, appropriate, and timely supports to assist recovery,” McCoy said.
The €15bn reboot package must include measures aimed at consumer confidence, business investment, and returning the worst impacted sectors to normality, according to Ibec. It suggests that the package be set out on a multi-annual basis for fiscal years through to 2022.
Ibec’s calculations suggest that another 0.7% of GDP should be spent on discretionary fiscal measures aimed at offsetting the economic impacts of the crisis.
