[timgcap=Ibec CEO Danny McCoy urged the Government They also say the government must move from a ‘safety net’ to an ‘income continuance’ approach in their labour market response, which will require a lot more investment.
“Traditional measures aimed at increased economic activity are unlikely to work at this stage given the supply shock.
“The Government must focus during this phase on acting as an income source of last resort for those businesses and households who have lost their regular incomes.”
This new report outlines a two-phase strategy — mitigation and preservation, and then reboot and recovery.
The mitigation and preservation stage would involve ensuring business continuity for manufacturing and essential services, an upscaled income replacement model for employees, and the government helping to keep suspended firms in business alive through more substantial tax deferrals, credit guarantees, and liquidity supports.
The second phase, the reboot and recovery stage, involves fiscal stimulus measures to ensure V-shaped recovery from the crisis, an increase in public investment programmes for housing and other infrastructure, and targeted sectoral stimulus measures for the most severely impacted firms.