Tánaiste hails ‘day of hope’ as he pledges continued financial supports

Up to 15,000 businesses could re-open and 200,000 people could get their jobs back in May with the easing of Covid-19 restrictions, Tánaiste Leo Varadkar has said.

In advance of the formal announcement of the re-opening of the economy by the Taoiseach, the Minister for Enterprise, Trade and Employment reiterated Micheál Martin’s assertion that there would be no “cliff-edge” reduction or cut in pandemic financial supports.

Telling TDs it is a “day of hope”, he spoke in the Dáil of an increase in personal freedoms. He also said supports will continue at least until the end of June.

And he said that at the end of May, the Government would set out a “clear plan of what’s going to happen from July onward” but also said the supports were funded through borrowed money and had to be refinanced.

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Independent TD Michael McNamara had criticised the fact that pregnant women who had received €350 through the pandemic unemployment payment were “penalised” once they gave birth, with a reduction to the maternity benefit of €245.

Mr Varadkar said he would like to see a reform of the welfare system and believed that maternity payments should be increase. However, he said payments are funded through the Social Insurance Fund and they had to discuss whether employees and businesses are willing to pay more.

This was an issue he was considering, he said, but cautioned that he believed that there was too much talk in the Dáil about “free money”.

Asking about supports for businesses and workers, Sinn Féin enterprise spokeswoman Louise O’Reilly said the Government “has continuously said there will be no cliff edge when it comes to income support. It’s really unfair that you would not put some shape on what that means.”

The Fingal TD said workers and businesses that have not reopened and may not open as quickly as other enterprises were “terrified” about what might happen in July.

Dead cat bounce

“It’s only fair that for so long as people can’t go to work or businesses can’t reopen due to public health advice, that those workers businesses and their families will retain the full support afforded to them.”

Mr Varadkar added that sectors like hospitality, tourism, aviation and the events and arts sectors “will need ongoing financial support for quite some time”.

He said that when restrictions ease, “we will see a bounce in consumer spending, but we need to make sure that’s not a dead cat bounce.

“And the last thing we want to see is a booming consumer spend, falling off in a few months’ time and at the same time, we then withdraw the financial supports that people and businesses need.”

He said “that would be a mistake, and we need to get this right”.

But he warned that “we need to be honest about this” and the funding provided, about €28 billion to date, “is all borrowed money”.

“This is money borrowed from the banks, from bondholders” and it will have to be refinanced, he said.

Ms O’Reilly said the Government needs to “articulate a firm commitment to maintaining support until such time as businesses are not only reopened but properly established” and fully trading. And she called for flexibility on the Covid Restrictions Support Scheme for businesses.

Mr Varadkar said many of the restaurants and pubs that might be able to open outdoors in June will still be able to avail of the payment because their businesses are not fully trading.