Scorched-earth policy and poor communication by Government has imperilled our economy for years to come

THE past year has been dramatic, damaging and disturbing in every conceivable way. There have been 4,821 Covid-related deaths since March 2020; the ordinary lives of people have been cast into chaos; many businesses and business owners have gone through hell; and the inadequacies in our health system and in many aspects of public policy delivery have been cruelly exposed. The legacy of Covid-19 will remain with us for years to come, and will not be a positive one. If one is being perfectly honest, Covid-19 is a once-in-a-lifetimetype event (we hope) and there are no easy or unambiguously correct answers or solutions.

However, I have serious concerns and reservations about the approach that has been adopted and followed by the Irish authorities in the face of the pandemic.

The dominant approach of the Government, at the behest of the National Public Health Emergency Team (NPHET), in seeking to control the virus has been characterised by very stringent restrictions on social and economic activity.

Let us not forget, the Oxford Stringency Index shows that since March 2020, Ireland has been subjected to amongst the toughest set of lockdown restrictions in the world, and unfortunately stringent restrictions look set to remain in place for the foreseeable future.

GOVERNMENT policy has been very heavily dictated by NPHET. That body was given a very one-dimensional mandate relating to Covid-19, and was not given any mandate to even consider broader issues relating to business, the economy or society. NPHET also did not have any members with business acumen. The Government, in the main, went along with the recommendations of that body, with a few exceptions.

Government failed to put in place proper testing, tracing and tracking, or rapid antigen testing, but largely relied on a scorchedearth policy of rolling lockdowns. This represents a policy failure and at the end of this crisis, a stringent cost-benefit analysis is unlikely to show the Irish authorities in a good light. Neither was there any real attempt made to carry out a costbenefit analysis of this approach, nor has there been a scientific approach to risk assessment.

One of the characteristics of Ireland that has become very apparent over the past year, has been the marked lack of challenge to the orthodoxy, and indeed those who put their heads above the parapet have been greeted with gross hostility. I published my first attempt at a cost-benefit analysis of the Irish approach to the crisis last week, and while I got some positive feedback by self-described members of the silent majority, the general reaction has been hostile, with the typical reaction being that I don’t care about the tragic loss of lives, and I only care about the economy.

That is fundamentally incorrect. I conducted a cost-benefit analysis which sought to look at the costs of the policy approach, as well as the benefits. The benefits include the lives that may have been saved, and the pressure that has been kept off our totally under-resourced health system. However, the costs have been enormous also from a business, economic, social and health perspective. I believe it is fair to say that in the longer-term the costs may well be shown to have far outweighed the benefits.

Reference is also made to ‘what happened at Christmas’. I guess my reaction to that is that if you keep people locked up for months on end, when they are eventually released, they will tend to go mad.

My farming background brings to mind the analogy of young hungry bulls being penned in a field with sparse grass for a few days, and then released into a field of fresh grass, and just watch what happens.

The policy of rolling lockdowns has saved some lives and controlled pressure on the hospital service, but is contributing to higher unemployment; business failure; poverty; inequality; interrupted preventative, diagnostic, and therapeutic healthcare; interrupted education; loneliness; mental health issues; and domestic violence. These externalities have not been given anything remotely resembling proper consideration in Ireland’s stringent lockdown strategy. The economic costs include lost economic output, which I estimate at €15billion at least in 2020; the permanent loss of many jobs and many businesses; dramatic damage to vital sectors; a legacy of very dangerous levels of Government debt, which will impact on future taxation and the funding of essential public services; and the damage to entrepreneurship and investment in the economy. Many of the jobs lost will not be recovered for the foreseeable future, and many of the businesses forced to shut down or seriously restrict activity, will either not reopen or struggle to survive once they do.

The public debt amounted to an estimated €218.6billion at the end of 2020, up from €204.2billion at the end of 2019. This is equivalent to €44,000 for every person resident in the State.

THIS is amongst the highest in the developed world and is expected to increase to €47,700 by the end of 2021, with public debt projected to reach €239billion. This debt will have serious repercussions for future spending on areas such as health and education, and for taxation.

Ireland’s international connectivity has also been seriously damaged, and may not return. The notion that life can quickly return to normal once restrictions eventually ease is naïve in the extreme.

This will inevitably damage tourism and international business for years to come.

I found it quite depressing to hear the CEO of Ryanair, Eddie Wilson, say last week that Ireland is now ‘last on our list’ for investment.

Perhaps it is now too late to undo the damage, but it is essential even at this late stage to properly assess risk, which is never fully avoidable, and allow low-risk activities to recommence immediately. The scorched-earth approach, and the disastrous communications strategy are simply not working.