IT’S fair to say the eye of this storm will be nothing like we’ve weathered before. We are in unprecedented times for our public health services and personnel, for business, for communities, for families and for those unemployed or facing unemployment, or reduced earnings due to this crisis.
There is a difficult road ahead. Though, interestingly, if we have learned anything about ourselves over the past few weeks, it’s that we are resilient, we have strong communities.
What happens as we move through this crisis and beyond will be our next great test. We must do all we can now to ensure as many people as possible avoid unemployment, that jobs are protected, that businesses are supported, that the construction of housing and apartments recommences appropriately, that commitment remains to our transport and infrastructure projects and services, and that the growth of sustainable thriving communities is prioritised even more on the national agenda.
If we don’t, we will face the reality of navigating a major public health crisis, only to be met with the full impact of an economic crisis. We must take on board the lessons from the last recessionary period in Ireland where investment in public transport, infrastructure, essential amenities and services became a nice to have instead of a must have. This is not where we want to be in another 10 years.
It’s hard to believe that it was only a few weeks ago that the Covid-19 threat to Ireland moved from potential to imminent and is now a very real part of our daily lives. At this time, the Economic and Social Research Institute published its quarterly report, basing its predictions for unemployment on a 12-week pandemic scenario. Though hard to accurately predict due to the lightning fast pace of the evolving situation and the uncertainty around the 12-week duration, this scenario presents us nationally with a stark reality. Predicting a 7% contraction of the domestic economy, with a rise in unemployment nationally from 4.8 percent in February to 18% percent in Q2 2020. Unemployment will be likely to drop back to 12.5% by the end of the year. Even more recently the Central Bank, in its latest quarterly outlook, costed the current Government measures at 8.2 billion euro, estimating unemployment as likely to reach 25% by the summer as a result of the economic shock to output and productivity, while GDP is on course to drop back by 8.3% for 2020.
Though it’s fair to say that for now, it’s next to impossible to get a firm gauge of the full impact, with Government departments using their existing budgets to cover support packages, which in itself will require budget revisions in the months ahead. Government have this week announced a revision to the total cost of state income and wages supports up from the previous estimate of 3.7bn euro to 4.5bn euro, all based on a 12-week period, with nearly 800,000 people now totally relying on income from the state, bringing it to over one million those who are either fully or partially dependent on state supports for income. It’s hard to see where this might land right now, and while stark these are the measures that must be taken to give businesses and communities a fighting chance.
While nationally we face into the eye of a public health emergency, one which remains the foremost priority, it is crucial too that we work now to proactively take all steps to alleviate the societal and economic pressures and effectively manage the likely aftermath. We must take the learnings from the 2007 - 2008 global financial crisis and the years of austerity that followed, and avoid repeating the measures that stifled economic, community and social resilience.
The global financial crisis saw Government in the subsequent years focus away from public transport and housing as the construction sector crashed. These are critical areas that in recent years we’ve been grappling with. These issues will be waiting for us after we move through our health crisis into an economic suppression. It’s so important that as we navigate the ‘beyond’ phase of this crisis that we do so in a way that supports public spending and investment in essential services but also the fundamental building blocks of strong communities and thriving economies.
Currently Ireland is ranked at the lower echelons amongst our eurozone counterparts when it comes to spending on public transport. Longer commute times, growing congestion, rising emissions, and decreasing air quality are all symptoms of this, although the current temporary respite is now well documented. We must now grow public investment in these areas, and not cut back this essential investment as we have done in the past. We can’t afford as a nation to curtail essential activity. If we were to do so, we will end up spending more money in the long run, exacerbate the housing crisis, develop unsustainably and plan to fail.
While the crisis provides an unprecedented challenge to the exchequer, it is equally clear that austerity is not the route to recovery. A discussion must begin on the use of infrastructural investment as the vital core of this phase, ensuring our construction sector has the continuity required to support our whole economy.
Projects outlined in the National Development Plan, the development of affordable, private and public housing stock, and investment in public transport infrastructure through the commitment to delivering the Cork Metropolitan Area Transport Strategy must remain solidly on the national agenda for the incoming government. It is the right thing to do economically and the right thing to do for our community.
Without a doubt, there is a challenging pathway ahead for Ireland but it is also the opportunity to further distinguish ourselves internationally and to be a better place for companies and people locally.
There is a long term reputational benefit to getting the public health dimension and stimulus package right. Quality of life, sense of identity, environmental awareness, and business competitiveness are intrinsically woven together. We have an opportunity for a stable and better economy and society and to leave a legacy of resilience and sustainability for generations to come.