Aoife Moore: Stimulus is welcome but has it been spent the right way?

Aoife Moore: Stimulus is welcome but has it been spent the right way?
Taoiseach Micheál Martin leaving the Cabinet Meeting in Dublin Castle. He announced a €7bn spend to revitalise the economy. Photo: Stephen Collins

They said it couldn't be done and, yet, here we are.

Ireland is in the midst of a rent freeze, an eviction ban, two separate welfare payments accommodating those who had been left with nothing or risked such a situation, a single-tier health system and a new rent subsidy. 

Notions that outside of a pandemic were viewed as just that: notions.

The July stimulus unveiled today is a package of spending measures so large that had Fianna Fáil suggested them eight months ago, Leo Varadkar would've used them as election posters. It amounts to around €7bn of spending in order to bring us back from the brink and is focused "almost solely on jobs".

Many are still feeling the sting from the last recession and neither of the Civil War parties wants to be seen to be bringing us back to austerity. Not yet, anyway.

"New jobs", "more jobs", "a job for every man," has long been the promise made by almost every new government in the history of the state, and Micheál Martin, a slave to tradition, is no different.

This stimulus is essential. The fact it's almost risk-free in terms of borrowing interest rates is a bonus because whether we could afford it or not, it needed to be done.

There are many good ideas here. Focusing on retraining people in their 40s and fifties is to be welcomed, for the economy and our collective mental health. Targeting the arts sector, which has been decimated by Covid-19 and not likely to recover this year, is important due to how Ireland sees itself and how we're seen by others.

The devil is in the detail, though, and although any stimulus to our ailing economy is welcome, we should remain cautious of how this money will be spent, for in that reveals the government's mindset.

Ironically, Micheál Martin argued for grants over loans last week in Brussels.

"I believe, personally, and Ireland believes, that pouring more debt on debt, is not the way out of this," he said, before allocating a mammoth €2bn for the Covid-19 credit guarantee scheme, and only an extra €250m for restart grants. 

The government has been told repeatedly that the small businesses who qualify for credit guarantee are not likely to avail of it. For those with little cash flow, taking on more debt is unthinkable.

The health sector, which has shown much resilience and the very best of human nature from its workers during the pandemic, is being given funding "towards capital projects". More buildings, which will create construction work and if done right, improve capacity.

Yet "care in the community" was the promise of every party in the election because of its benefits, freeing up hospital beds, creating jobs in the care sector and keeping people at home, near family. Investment in such public services would create jobs and finally point our laggard healthcare system in the direction we all want to see it go. In the stimulus package, it garnered no mention.

Education, likewise, will be awarded millions for modular builds, but as one senior education source said: "You can give education millions, but you can't magic up space or planning permission". 

Therein lies the concern. This stimulus is most welcome and necessary, but whether it's spent in the most effective way, remains to be seen.

Housing, widely regarded as the current state's greatest shame, saw little to nothing from the pot, apart from some funding to buy vacant houses, due to the focus on "shovel ready" projects. 

The government argue building social housing takes months in planning stages which wouldn't resolve Ireland's current financial woes. This could well be true, however, we must remain cautious that when October rolls around, and a new budget is set, that those sectors so desperate for help are not left behind again.

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