Public spending on pandemic will soon be reduced, Government warns

ireland
Public Spending On Pandemic Will Soon Be Reduced, Government Warns
The Government warns it is necessary to roll back public supports so as not to overheat the economy. Photo: Paul Faith/AFP via Getty
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Huge public spending on Covid-19 will soon be reduced, according to a warning the Government will issue next week to unions and employers.

It also says that, with the private sector recovery gaining momentum, it is necessary to roll back public supports so as not to overheat the economy.

According to The Irish Times, the warning by the Department of Finance is outlined in papers circulated to stakeholders in advance of the National Economic Dialogue next week.

Officials point out that public debt is among the highest in the European Union, and on a per capita basis stands at about €45,000 per person. It is also among the highest levels in the world, they say.

Spending cuts or tax increases will be needed, according to the department, to finance future spending on pensions, healthcare and climate action.

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The warnings also come as the hospitality sector is calling for increased financial support of up to double current levels if the return of indoor services is delayed due to the threat posed by the Delta variant.

The continuing uncertainty over whether indoor services in restaurants and pubs can resume on July 5th has sparked a backlash from hospitality representatives.

Nphet meeting

Ireland
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The National Public Health Emergency Team (Nphet) is due to meet to discuss the issue on Wednesday. This will be followed by a Cabinet sub-committee discussion, with a final decision due after a full meeting of the Government on Thursday.

Adrian Cummins, the chief executive of the Restaurants Association of Ireland said the “summer is lost” to restaurants, particularly in tourist areas, if they don’t get a “good July”.

“The Government now need to step up to the plate and increase the level of payments if we’re going to be shut down for July,” he said, suggesting that the Covid Restrictions Support Scheme (CRSS) should be doubled.

Government sources told The Irish Times financial supports are likely to be considered if there is a decision to postpone reopening, with one suggesting there would be “sympathetic voices in Cabinet”.

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