Finance Minister issues stern warning about what level 5 would mean for unemployment

FINANCE MINISTER PASCHAL Donohoe warned of the consequences of moving to Level 4 or 5 restrictions, emphasizing that it could mean people losing their jobs “for the second time this year.”

Donohoe spoke at the Treasury White Paper publication this afternoon and said the government expects to run a deficit of just over € 21 billion this year.

He added that if no budget changes are made to next week’s budget, the government would expect to have a deficit of 14.5 billion euros next year, refusing to give details on what the actual projection is.

The Finance Minister emphasized that these projections are based on the current public health orientation and that if the orientation were to change, the deficit “would grow and grow and grow.”

“That is why in any decision that is made regarding the need to make more decisions to move to Level 4 or Level 5, we just need to be aware of the many repercussions that will have,” he said.

Donohoe added that he is far more concerned about what Level 4 or 5 would mean for unemployment than it is for the budget deficit.

“The biggest concern I would have would be the impact it would have on unemployment and the number of people who could lose a job for the second time this year,” he said.

That is my greatest concern in any decision we may make. If the public health guide provides a very strong case for moving to Level 4 or Level 5, I will certainly consider that at that point. But it will make you aware of the employment consequences it could have later in the year.

“And that’s what worries me a lot about our society right now,” he added.

The government had previously estimated that spending on Social Protection this year is forecast at more than € 30 billion, but Minister of Public Expenditure and Reform Michael McGrath said this would increase if there was a move to Level 4 or Level 5.

“Just to give an idea of ​​the immediate fiscal implications, in the initial phase of the pandemic, when we were in an essential national lockdown, we had at the peak close to 600,000 people in the PUP with a weekly cost of around 200 million euros , ”McGrath said.

Next week’s budget

The finance minister declined to provide too much detail on the plans for next week’s budget, saying there is “work to be done” on the plans.

For the past several years, the Christmas bonus for welfare recipients was confirmed on budget day, and McGrath also declined to say now whether this year’s double payment will be made.

“Regarding the Christmas bonus, no final decision has been made on that issue at this time,” he said.

We are very aware, on the one hand, that it has been a very difficult year for so many people, including many people who lost their jobs. But, on the other hand, the Treasury is in a very tense position as a result of all the additional costs that we have had to incur.

“So, we will weigh all the different considerations in the coming days and I hope that together with Minister Heather Humphreys they will confirm the position next week.”