Watchdog questions how health plans will be funded
THE State’s fiscal watchdog has warned there are “big questions” on how ambitious plans for the health service will be funded under the proposed programme for government.
TDs were also told 400,000 people could still be unemployed at the end of the year and some who lost their jobs may not return to the workforce due to issues with childcare.
It comes as the Dáil’s coronavirus probe heard from economists and senior Government officials.
Acting Irish Fiscal Advisory Council (IFAC) chairperson Sebastian Barnes raised questions on how Sláintecare – the plan for a single-tier heath service – will be funded to the tune of €3bn a year under the proposed Fianna Fáil/Fine Gael/Green Party government deal. The programme for government includes a commitment not to raise income taxes and USC, which had been a key Fine Gael demand.
Mr Barnes said around €10bn in budget adjustments will be required under the main scenario on the impact of the Covid-19 crisis on the economy.
“Any incoming Government will have to take difficult decisions about competing spending and tax priorities,” he added.
Sinn Féin TD Mairéad Farrell outlined how tax cuts promised in the programme for government, including indexing tax credits and bands, could cost as much as €4bn.
She raised concerns there could be spending cuts in health, housing and childcare as a result.
Mr Barnes said there are commitments in the programme for government on income tax, which is a third of Exchequer returns.
He said raising taxes on this large part of revenue is being ruled out while there is also commitment to maintain social welfare rates.
Mr Barnes said there are “big questions” on how measures like Sláintecare are going to be financed.
“The options are to reduce spending in other areas, to increase the efficiency of spending, or to increase taxation in other areas,” he said.
“However, as important options are being kept off the table, it is going to be very difficult to balance those things and to meet these new spending commitments around housing and health.”
During the same debate, Fianna Fáil TD John McGuinness raised his own concern over the plans in the programme for government.
“There is nothing really factual in the programme in terms of costs,” he said.
“Therefore, we do not know where that programme will end up or, indeed, how much of it will be implemented.
“That is a concern where taxes are concerned because there is a commitment to no increase in taxes.”
Department of Public Expenditure and Reform (DPER) boss Robert Watt appeared before the Special Committee on Covid-19 Response later in the day.
Mr Watt said around 400,000 people may still be unemployed at the end of the year but that’s subject to “enormous uncertainty”.
There has been widespread concern childcare capacity will be reduced when crèches reopen due to the coronavirus crisis.
The Government intends for schools to fully reopen at the end of August but plans are still being prepared for this to happen.
Aontú TD Peadar Tóibín referred to the schools reopening and suggested this may be an issue.
He said there could be a 100pc return by pupils or “far less than that”.
Mr Watt said: “There’s a possibility that, even if jobs become available, that because of the childcare situation people will not take up those opportunities.”