Public health, public purse: Irish Times view on a week of big choices

Decisions will have a direct impact on the lives of citizens and may determine the political fate of the Government

The Government has taken a calculated risk that the vaccine rollout regime will be sufficiently advanced to ensure that rising case numbers will not result in another serious wave of hospitalisations and deaths. Photograph: iStock

The Government has taken a calculated risk that the vaccine rollout regime will be sufficiently advanced to ensure that rising case numbers will not result in another serious wave of hospitalisations and deaths. Photograph: iStock

 

The Coalition made two momentous decisions in the dying days of the Dáil term which will have enormous implications; they will impact directly on the lives of citizens and are likely to determine the political fate of the Government at the next election.

The decision with immediate effect was to proceed with the relaxation of Covid-19-related restrictions to permit indoor dining later this month, despite rising case numbers due to the spread of the now dominant Delta variant. The complex reopening scheme has drawn some criticism but there is no perfect answer to the ongoing challenge posed by the virus. It was always going to be difficult to strike a balance between allowing society to gradually return to some sense of normality, after almost 18 months of lockdown, while keeping a range of safety measures and restrictions in place.

The Government has taken a calculated risk that the vaccine rollout regime will be sufficiently advanced to ensure that rising case numbers will not result in another serious wave of hospitalisations and deaths. Only time will tell whether that calculation was correct. If it turns out to be wrong, the Coalition will have to accept responsibility and the political consequences that go with it.

The second massive decision made before the Dáil adjourned was a radical shift in budgetary policy, with the stated primary objective of tackling the housing crisis. The failure to deal adequately with housing supply and soaring prices was a running sore for the last government. A fundamental change of direction was required to underpin the new housing strategy which is expected to be unveiled next week and it appears that the Government has embarked on a new course to deal with the scale of the problem.

In its summer economic statement it abandoned plans to return to a balanced budget by 2025 and instead set out on a path of substantial budget deficits. The decision was reached after serious wrangling between Minister for Finance Paschal Donohoe and Minister for Housing Darragh O’Brien. The upshot is that the Government is now planning an additional €18.8 billion in borrowing over the next five years, much of it to fund housing construction.

The Government’s approach is an acknowledgment that radical action is required to deal with the housing crisis. However, permanent increases across so many areas of Exchequer spending, without extra revenue generation, create huge risks. The additional borrowing now envisaged will leave the exchequer with a public debt per capita that is one of the highest in the world. There are real societal and political imperatives but that does not reduce the necessity that spending on such a large scale is strictly managed to deliver the promised results.

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