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What to expect in the first 100 days of the new FF-FG-Green government

There are big challenges ahead. Here’s what to look out for.

THE OLD CIVIL War enemies have been in power for over a week now, with the Taoiseach, Tánaiste and newly-appointed ministers bedding into their new roles. 

Today the three party leaders will sit side-by-side during this Dáil’s very first Leaders’ Questions debate. 

The coalition between Fianna Fáil, Fine Gael and the Green Party will last for five years if it runs to its full term – and with a programme for government that runs to 126 pages, there is a lot to get through.

But what are the priorities for the first 100 days?

July stimulus

First thing’s first. Getting the economy back on its feet after the Covid-19 public health emergency. 

Tánaiste and Business Minister Leo Varadkar said the government’s July stimulus package will be “far-reaching” adding that it has to be in order to jump-start the economy after the shock of the pandemic.

In addition to a Recovery Fund, which is a €2 billion fund that will focus on investment in large and medium enterprises employing more than 250 employees or with an annual turnover in excess of €50 million, the government will introduce the July Jobs Initiative.

It is expected that clarity will be given on the Temporary Wage Subsidy Scheme, which is likely to be extended beyond the August deadline, but will taper off as profits return to businesses.

Clarity will also be given on the Pandemic Unemployment Payment (PUP). Varadkar has already indicated that the government cannot operate different social welfare schemes moving forward, stating that they will have to coalesce at some point.

Social Protection Minister Heather Humphreys will have to deal with that thorny issue of the government’s aim to get people off the payment and transferred over to the TWSS.

Some employers did not avail of TWSS when they closed, with employees signing up for the PUP. As businesses reopen, the department is encouraging employers to avail of TWSS when hiring staff.

The number of people receiving the PUP continues to fall, with yesterday’s figures showing the numbers had dropped from 439,000 last week to 412,900.

As of the end of last month, those who were earning €200 or more per week before the lockdown will continue to get a payment of €350 per week.

Those who were were earning €199.99 or less per week will now get a Covid-19 Pandemic Unemployment Payment of €203 per week. 

Sectoral task forces will be set up with independent experts and stakeholders, and the groups will be chaired by line ministers. Each group will focus on the specific needs of sectors.

An SME and State Bodies Group will also be chaired by Varadkar and Minister for Finance Paschal Donohoe to coordinate the response to aid SMEs impacted by Covid-19.

A review of the Irish economy will also take place in a bid to identify the sectors that have
the greatest opportunity to grow and sustain employment.

The Dáil will also legislate for the introduction of a new €2 billion Credit Guarantee Scheme.

This facilitates loans of €10,000 to €1 million. Rather than a grant, an interest rate will be charged on the loan set at the banks’ SME lending rates. In addition, the borrower pays a premium which partially covers the cost of providing the state guarantee.

The government has said a review of the Restart Grant and grants schemes will also be carried out. That will give some hope for SMEs that have been crying out for assistance in the last week.

NO FEE Exchequer Statement JB6 Public Expenditure Minister Michael McGrath and Finance Minister Paschal Donohoe

Public Expenditure Minister Michael McGrath told TheJournal.ie last week:

“Grant schemes have an important role to play… of course one of the issues that is being examined is whether we can do more in those areas [of the Restart Grant and commercial rates waiver].

“I think it is fair to say there is a limited appetite for taking on additional debt among a lot of businesses. So we are examining the different working capital schemes that are there… but grants have a role to play.”

The July stimulus will also allow for the warehousing of tax liabilities for businesses. The government’s MicroFinance Ireland loan scheme, which has had some teething problems, will be scaled up too. 

Additional measures on how to support the sectors that have been most impacted by the public health emergency, such as hospitality, retail, entertainment, arts, and
leisure sectors, will also be outlined relatively early on.

McGrath said the stimulus package will “be substantial, it will be ambitious, and it will reflect the scale of the challenge”.  

Climate Action

It’s been described as the “Greenest programme for government” in history. There are some big promises made in it, so the government has to take action on the commitments fairly swiftly. 

So it is no surprise that the target to achieve net-zero emissions by 2050 will be set in law by the Climate Action Bill, which the government says will be introduced in the Dáil within the first 100 days of government.

This will also establish the new Climate Action Council, which will set targets for individual departments and sectors, and apply sanctions to those that do not meet their reduction targets.

The Bill will define how five-year carbon budgets will be set. Every sector will contribute to meeting this target by implementing policy changes.

Within the first 100 days, the new government also promises to publish a roadmap with specific targets and actions for farmers that the document states will “reward farmers who deliver enhanced environmental performance”.

Housing

It was one of the biggest issues of the general election. It has somewhat been buried a bit due to the Covid-19 crisis, but the problems remain the same: Lack of supply, increasing rents, high homelessness numbers and unaffordable house prices.

A roadmap for social, public and private house building should be expected early on, with Fianna Fáil keen to put their stamp on resolving the crisis.

However, the government might hit a stumbling block with the new Housing Minister Darragh O’Brien admitting that the stalling of the construction sector during the public health emergency is likely to mean that this year’s targets won’t be met.

His predecessor Eoghan Murphy also acknowledged this previously. 

Speaking this week, the Tánaiste said there are some questions as to why construction activity is not revving up faster.

“Even though construction activity has been back for six weeks and we are told that 80% of sites are now open, there are still 45,000 construction workers in receipt of the pandemic unemployment payment. There is something not right there.

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“I do not know what it is but we need to dig down into that and get people back on site. We also need to provide alternative construction employment for those who cannot return to sites for various reasons. Retrofitting would certainly be top of the list of such alternative jobs.”

This will be one of the problems the government will want to fix quickly. Promises need to be delivered upon and fast.

Health

The new Health Minister Stephen Donnelly has a big challenge on his hands. First, dealing with the Covid-19 issues, but also the reopening of the health service and preparing for any overloading of the system in winter.

Donnelly said the plan to reopen the health service will not be coming next week, and could, in fact, take “several weeks”.

Fianna Fáil and other parties had been critical of the pace at which Irish hospitals were resuming back-to-normal business. 

Such a timeline of several weeks could be this government’s first headache but is something they will have to move on quickly. Micheál Martin said yesterday this is one of the government’s key priorities.

Each year, Fianna Fáil would also be quick to criticise the delay in releasing the HSE’s Winter Plan. This is something that should be published well ahead of any flu season.

Education 

First-time TD, Fianna Fail’s Norma Foley has perhaps one of the greatest challenges in government – how to get thousands of children back to school at the end of August. There are concerns about the social distancing guidelines, with parents calling for clarity on the issue. It is likely a solution will not be announced until closer to the return date.

Budget

If ever there was going to be a fall out between the parties, it is likely to feature in October’s Budget.

The three parties agreed to borrow money to stimulate the economy, with Green Party leader Eamon Ryan and others stating that it is good to do this when Ireland can borrow at low-interest rates. 

However, the Budget will be the first real test of the seriousness this government has towards the Green initiatives in the programme for government. Planning and preparation for Budget 2021 is set to begin in August. 

Politicians are set to have much shorter summer holidays this year, with the Dáil set to only get three weeks recess in August, something Varadkar flagged previously.

Public Pay Deal

It hasn’t been spoken about much this summer, but one of the first major challenges facing the new public expenditure minister is the new public sector pay deal.

Throughout the pandemic, there has been a narrative about how we must appreciate our front line workers, and pay them adequately.

McGrath has indicated that he would like to see a new deal negotiated later this year, however in an interview with the Irish Examiner newspaper, he suggested there will be no rowing back on the commitment to pay the next round of 2% pay increases in October, despite the huge budget deficit.

If such a commitment were to be reneged on, there would be significant backlash from the public sector workforce, but also the public at large.

“I do think it is important we have stability in terms of public pay policy. There will be a requirement for a new agreement but it is important that a new agreed position on public pay is reached. We have a huge regard for our public servants during the Covid pandemic. Hopefully, an agreement can be reached in the months ahead,” he said.

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