It would be fair to assume that the last thing finance minister Paschal Donohoe wanted to see this week was a letter from the European Commission highlighting the economic, social and environmental problems that remain to be fixed by the Government.
The letter, sent in reply to the ministry’s national reform and stability programmes, could be seen as a collection of statements of the obvious — “The challenges facing Ireland in regard to poverty and employment quality and support, including for people with disabilities, remain and they are likely to be exacerbated by the pandemic”; wraps over the knuckles for acknowledged weaknesses in health, housing, and environment policies; calls for government programmes that “support “employment through developing skills”; and a request for an economic juggling act: “When economic conditions allow, fiscal policies aimed at achieving prudent medium-term fiscal positions and ensuring debt sustainability should be pursued, while at the same time enhancing investment.”
There’s a special admonition for a worrying aspect of our tax regime that Mr Donohoe has already recognised: an over reliance on corporation tax revenue from a very small number of multinational companies.
The commission says the tax base should be broadened “over this year and next”.
An EU commissioner has likened the Covid-19 crisis to an asteroid that has blasted a crater-shaped hole in the European economy.
As the finance department struggles not only with both the social and economic rubble thrown up by the cataclysm but also the looming likelihood of a hard Brexit in January, that’s a tax problem that will have to be tackled later rather than sooner.
In the short to medium term, the ministry will need every tax cent it can get.