Fiscal policy and stimulus measures
Roll out a €15 billion reboot plan within the first 100 days of new Government
Government must do whatever it takes to restore the economy and should endeavour to offset the collapse in GDP with increased public spending, tax supports and investment. It is likely that the automatic stabilisers, including enhanced welfare supports, will offset about 30% of GDP decline and the remaining 70%, or €20 billion, should be allocated through a stimulus package to be primarily delivered during 2020 and 2021. This would involve new measures of about €15 billion, in addition to supports already announced by Government. The scale of the package is both affordable and necessary and would be in line with international expert opinion and best practice.
Continue to enhance the suite of liquidity supports for business
The scale of public supports provided to address the liquidity crisis remains far behind those in most other countries and further measures such as low or zero cost loans, export credit insurance and extended state guaranteed loans are urgently required.
Write down some debts and provide cash grants to SMEs
For many businesses liquidity supports will not suffice and they will need further supports such as extended write-down of commercial rates debts; enhanced direct grant payments; and State support to resolve commercial rents disputes; and ultimately long-term equity supports.
Provide stimulus measures for consumers and impacted business sectors
A range of targeted stimulus measures should be provided as soon as containment measures are removed. These should include tax changes to support employee voucher benefits, additional social welfare payments, grants to aid required social distancing investments and the reintroduction and expansion of the 9% hospitality VAT rate.
Establish a Commission on Taxation
Government should immediately establish a Commission on Taxation in order to address both the immediate tax revenue challenges of the crisis and a range of other long-term issues such as environmental taxes and the sustainability of the wider tax base.