Irish Examiner View: Solidarity is vital in face of coronavirus siege

Irish Examiner View: Solidarity is vital in face of coronavirus siege

Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath are expected to publish a budget that will be as difficult as any published in the Dáil's 101-year history. Image: Julien Behal

The Siege of Candia - Crete today - began in 1648 and continued until 1669 making it the longest recognised siege in history. Although Ottoman invaders eventually prevailed the Venetians, who ruled Candia then, held out for 22 years. It may be, in a world besieged by Covid-19, possible to appreciate some of the grave challenges faced by Candia. However, that it took 22 years to bring matters to a conclusion is hardly uplifting.

Earlier this week Cork County Council's CEO Tim Lucey put the consequences of the Covid-19 siege into a sobering context when he described the devastating impact it is having on the authority's income and its capacity to deliver services.

Describing a situation facing all local authorities, Mr Lucey predicted a significant increase in property tax and recycling charges. He also warned that community-enhancement schemes could not be sustained and that significant cuts to road, footpath and street-lighting programmes were inevitable. Repairs to local authority houses will be curtailed too, exacerbating our housing crisis. Support for various festivals and arts programmes will also be cut. 

Mr Lucey anticipates the council's deficit might be as much as €19m. The council's head of finance Lorraine Lynch pointed out that even if maximum 15% increase in Local Property Tax was endorsed by councillors this would generate only €4.8m leaving a €14m hole. That figure may grow as ratepayers default because businesses have collapsed or barely survive.

Grim as those predictions are they are just a precursor to what will be unveiled in 21 days time - October 13 - when Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath publish a budget that will be as difficult as any published in the Dáil's 101-year history. It is foolish to imagine that anything other than a very hard, rocky and potholed road lies ahead as Government tries to balance borrowing and spending to mitigate the worst of Covid-19 and a nasty Brexit.

The speed at which our fortunes have changed is startling. Only seven months ago the country was more than solvent and we effectively enjoyed full employment. Now, next year's borrowing, all going well, will hit between €15bn and €19bn. That will be in addition to this year's emergency borrowing which is heading towards €30bn. 

That next year's borrowing will be focussed on supporting a more-than-stretched health service, keeping schools open and subsidising, where possible, jobs suggest that next year's borrowing might be much higher. International interest rates are so very low that such tremendous borrowing is possible in the medium term though any increase in rates would have a disproportionate impact. 

Just as there is no question of welfare increases or income tax cuts the aspirations for a new round of public sector pay rises must be set aside as pressure to extend the cut-off date for the employers' wage subsidy scheme beyond March 31 grows.

Over the next three weeks, speculation around Budget 2021 will intensify but it not necessary to speculate on the reaction to what will be a cautious, defensive, curtailing budget. There will be negative political and social reactions, social media hectoring too. Some will be hyper-critical and disruptive. It may be naive to suggest this is a moment for solidarity, and no little acceptance that valid hopes must, unfortunately, be deferred. That naivety, if that is what it is, prompts the obvious question: If not now, when? 

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