Covid-19’s financial legacy will be threat to State’s competitiveness, report warns

Government to be warned over impact of scarring effect of pandemic on labour market

Managing the scarring effects of Covid-19 on the labour market and the financial legacy of the pandemic will be key threats to Irish competitiveness in the coming period, the Government will be warned on Tuesday.

While the recovery in the general labour market will gain momentum, that of the arts, tourism and travel sectors will take longer, a new report from the National Competitiveness and Productivity Council says.

The council reports to and advises the Taoiseach on competitiveness issues facing the Irish economy.

Hospital Report

Its new report, which will be brought to Cabinet on Tuesday by Tánaiste and Minister for Enterprise Leo Varadkar, outlines how important decisions will be needed on fiscal policy to ensure the economy does not overheat, and to give the Government latitude to deal with any future economic shocks.


Pandemic financial supports that remain should be targeted at firms that are viable in the medium term but challenged in the short term, the report finds, while frameworks to support part-time working from home should be developed.

Strategies to bring down the cost of insurance will also be important for competitiveness, as will addressing the housing crisis and developing oversight of the Housing for All plan, it says. The cost of childcare should be addressed, the report says, while also warning that there is an ongoing threat from Brexit.

The council notes that the Government’s pre-pandemic approach to spending and strong corporation tax receipts have helped cushion the blow of heavy borrowing.

Redundancy claims

Meanwhile, the Government is expected at the end of this month to lift a temporary suspension in place during the pandemic on the rights of workers who had been temporarily laid off to trigger claims for redundancy.

Taoiseach Micheál Martin said in June that following the lifting of the suspension, the Government would “ensure businesses in financial difficulties are supported with a deferred payment arrangement while ensuring employees receive their entitlements”.

The Government had faced pressure from unions to assist workers where they could lose out on redundancy payments as periods spent on the pandemic unemployment payment (PUP) scheme would not count when calculating entitlements.

Separately, it has emerged that the HSE told the National Public Health Emergency Team (Nphet) it has not always been possible to give extra protection to unvaccinated people in hospitals because of the infrastructure in some locations.

During a Nphet meeting on August 25th, members were told of the “disproportionate impact that the current wave of [Covid-19] cases is having on those who are unvaccinated or who are experiencing waning [vaccine] immunity” and this was “noted with concern”, minutes of the meeting show.

The minutes show that members discussed hospitalisations and the need to be able to triage vaccinated and unvaccinated patients into “separate streams”.

The HSE confirmed during the meeting that while hospitals have been told to determine the vaccination status of patients on admission and told to protect those who are unvaccinated where possible, “in some cases the infrastructure does not allow for this”.

The need for “prompt identification of patients with high grade immunosuppression who are at high risk of breakthrough infections and ICU admission” was also stressed.

Jack Horgan-Jones

Jack Horgan-Jones

Jack Horgan-Jones is a political reporter with The Irish Times

Martin Wall

Martin Wall

Martin Wall is Washington Correspondent of The Irish Times. He was previously industry correspondent

Jennifer Bray

Jennifer Bray

Jennifer Bray is a Political Correspondent with The Irish Times