Economy

This is not ‘mammon over health’ debate – both are intertwined

A society needs a strong economy – without that we cannot sustain investment in health, in housing, in education

Feargal O'Rourke
Mon May 11 2020 - 03:15

In 1926 John Maynard Keynes wrote: "The political problem of mankind is to combine three things: economic efficiency, social justice and individual liberty." At this current time of crisis governments and business leaders are challenged to achieve a balance in these same areas.

Some are trying to frame this as a “mammon over health” debate – it’s not. The reality is they are both intertwined. The physical health of the nation must always be paramount. However, a society also needs a strong economy – without that we cannot sustain investment in health, housing, education. There is a mountain of evidence that poor economic outcomes will result in long-term poor physical health outcomes.

Closing the country was the relatively easy part. However, in order to restart Ireland we're going to need, at this juncture, an even more balanced and inclusive debate about the physical and economic health of the nation, with an even more creative, balanced approach than ever before. For that, we need a broadening of voices to include more business leaders and economists, not just those currently at the table. And first on the agenda has to be a truly national approach to testing.

We need a national testing programme that meets three criteria. It needs to be countrywide and pervasive with an ability to reach large volumes of people; it needs to be efficient with test results returned quickly; and it needs to be integrated with a comprehensive contact tracing programme. If you accept the thesis that this is the critical enabler, then the next logical step is to assign the broadest and best possible resources to the challenge. Harnessing the ingenuity of all sectors, public, private and academia, health-focused and business-focused professionals, is needed. It is not with any hubris that I say that the private sector will willingly lean in on this issue and provide whatever support is required – this must be the priority for all of us.

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If we assume that the testing programme is in place what else do we need to do to restart the economy? While there are a plethora of issues and topics, there are four I’d like to focus on due to their broad impact.

For business, the challenge is how do we get our people back to work in a way that puts the safety of our people and customers first, both now and from another wave of Covid-19 in the future.

Businesses need to develop protocols now for the new ways of office working or delivering services or goods that put the safety of our people and customers first. They simply will not be able to have all of our people back at the same time until a safe and effective vaccine is developed. Businesses which deal directly with customers such as hotels, shops, airlines, retailers, restaurants, cinemas and bars will have to develop new service models.

So we will have to have a form of rota office working to reflect the reality that fewer people can be in a workplace at the same time, face masks may become de rigueur, some form of temperature checking may be needed, as well as appropriate protocols for in-house canteens, lifts, reception areas, all guided by the Government’s public health policy. In our own case, we are looking at a scenario of significantly reducing the capacity of our offices to ensure the safety of our teams, while maximising our existing flexible working arrangements.

The reality is that businesses will need to be able to live with Covid-19.

Government has already announced bold and very welcome initiatives for employee wages, working capital and other supports. But more will be needed, both in quantum and breadth.

If we apply the learnings of the aftermath of the last financial crisis, we know that debt cannot be the only answer. Instead, more creative debt and, more importantly, equity-focused measures and supports will be required allowing businesses to restart on a stable footing once the country starts to reopen. We need to use digital platforms and the tax system to ensure equity can reach companies of all sizes across the country. Distressed yet viable businesses need to be supported and restarted so there is no permanent loss to the economy. We need to change our national approach and culture to rescuing companies. In Ireland, we only seek to rescue 3 to 5 per cent of insolvent businesses. This figure is over 10 per cent in the UK, and closer to 25 per cent in the US. We will need a dedicated rescue fund to invest in distressed businesses and to look at streamlining our examinership process.

Finally, the crisis is also an opportunity to change some things in our economy and society for the better. Think about how it has altered the way people interact, shop, bank and work. We have crossed a Rubicon in terms of services and our work – both public and private – such that this is not about returning to what we had, but rather repurposing Ireland for the future. Restarting Ireland, with digital skills and services at its core for every citizen, is central. That means a national workforce and upskilling plan like no other. We need to reimagine the possible – as we have done in all of walks of life over the past two months. We need to do this nationally and start to bridge the digital divide.

As a country we will not be found wanting for new ideas. Our approach to the current crisis has shown our collective ability to respond quickly, think differently and be innovative.

But to restart Ireland we need to work together, be bold and find that necessary momentum collectively. Getting our best healthcare people and our best business leaders around the table for an inclusive plan should be the way forward. A new social partnership for these times.

Feargal O’Rourke is managing partner of PwC Ireland

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