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There will be no cuts in public sector pay or an increase in income tax for “at least the first few years” after the pandemic, said Tánaiste Leo Varadkar.
nd immediate cuts to pre-pandemic welfare payments have also been ruled out, Tánaiste told Miriam O’Callaghan, on RTÉ Stellar hour.
Mr. Varadkar said it was important to give people the assurance that they would not face tax increases or pay cuts in the near future so that they would have the “confidence” to spend money and rejuvenate the economy once it reopens.
There are 14 billion euros in savings in Irish bank accounts accumulated due to the lack of spending opportunities in the last 12 months and the Tánaiste said the government “should encourage people to spend where possible”.
“When the economy reopens, we want 14 billion euros to be spent on the economy, we want to encourage people to avoid the savings paradox and not feel bad about spending money again when they can,” said Tánaiste.
The Tánaiste said that if people had that security, they would feel “more secure” about spending.
Varadkar said “no one knows for sure” when the government will enact the fiscal restrictions caused by loans during the pandemic to stop the national debt.
“We borrowed 19 billion euros last year and it will probably be similar this year … and that cannot last forever.”
The Tánaiste said that Ireland can now borrow at low rates due to the policy of the European Central Bank, adding that the government is clear that it cannot withdraw the additional spending too quickly or “otherwise the economy will not recover.”
“I remember 10 years ago I was a young member of a new government and at that time we had 15% unemployment with 30% young people unemployed.
“Public finances were in a terrible state and a lot of people were very pessimistic about whether we would ever recover or recover and we did.
“Until the pandemic, we had near full employment, a budget surplus and incomes were increasing, while inequality and deprivation were decreasing in Ireland. I think we can recover quickly and I think we will recover quickly, ”he said.
The Tánaiste agreed that the state has a duty to care for people who were left unemployed due to the pandemic, saying it was “totally random” and it came down to some people simply being in the “wrong sectors at the wrong times. “.
Mr. Varadkar admitted that there was a disparity between younger workers in less secure jobs and that there was a divide between the public and private sectors, with the private sector being the “worst hit” as the public sector expanded as a result. of jobs created due to the pandemic.
“We are training people, but at the moment it is quite difficult, since much of it is done online. There are tens of thousands of places available for people to return to education, we are incentivizing employers to hire apprentices so that many opportunities are available.
“For people in the pandemic Unemployment payment can go directly to the return to education subsidy or the return to business subsidy.
“I know it’s difficult under the circumstances, but I know an actress who has now returned to teaching and a pilot from my constituency who is now a math teacher,” Tánaiste said.
Mr Varadkar said that the Gardaí has not contacted him regarding the IMO contract with the Health Department that he gave to the GP Maitiú Ó Tuathail, who was the head of the NAGP, a rival organization of the IMO.
He said he would be happy to make a statement to the gardaí in case they ask for one and said his legal team is sure he did not commit any offense by giving Ó Tuathail the contact.
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