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Friday, January 21, 2022

Level of spending during Covid-19 not sustainable, says Taoiseach

While speaking at the National Economic Dialogue (NED), Taoiseach Micheál Martin stated that the current level of government spending during the Covid-19 pandemic is unsustainable and needs to move to the next stage.

The Taoiseach stated, “we must now move to the next phase, in which the finite resources that Government can deploy are targeted at those who need them most, and used in a way that best supports recovery and our future prosperity”.

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The NED, which took place online this year, allows for discussions in regards to how we can plan for October’s Budget.

Martin stated that the prominent concern is housing, which will be at the centre of the recovery of the economy. The Taoiseach added that the details of a new ‘Housing for All’ strategy would be published soon.

Minister for Finance Paschal Donohoe also spoke at the event and said that a “strongly expansionary budgetary policy” could not continue while growth accelerates and that it was important for fiscal policy to evolve to reflect changing circumstances.

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Donohoe added that the national debt would be close to €0.25 trillion by the end of the year.

In regards to the Pandemic Unemployment Payment (PUP), Donohoe stated that an improvement can already be seen, with figures falling from the annual peak of 481,000 in February to 245,000 as of June 1st, with further falls to be expected in the coming weeks.

He believes that the economy’s upturn is in an early phase but added that the recovery would be diverse in its impact as some sectors have already regained pre-pandemic levels of activity. Other sectors will have to change and adapt to reflect the post-pandemic environment, Donohoe added.

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