Pandemic spending should not define future aid

Martina Lawless, director of the Economic and Social Research Institute, stated on Monday that the financial measures used during the pandemic should not serve as the standard for future economic crises.

She spoke at a final roundtable hosted by the independent Covid-19 evaluation panel. Lawless described the pandemic as a major test of national resilience, noting that Ireland entered the crisis with strong fiscal positions. This status allowed the state to increase government spending by nearly €18 billion in 2020 to support households and businesses. The interventions helped cushion the immediate economic shock and contributed to a rapid recovery in employment as restrictions eased.

Lawless emphasized the value of maintaining financial reserves, particularly given Ireland's current large surpluses. She noted that these surpluses rely heavily on concentrated corporation tax receipts, which she described as potentially vulnerable. "Building financial reserves and avoiding permanent expenditure commitments based on potentially temporary revenues are not simply matters of fiscal prudence, they’re also investments in our ability to respond to future shocks," she said.

She argued that the exceptional supports provided during the pandemic were appropriate for that specific event but should not become the benchmark for every future economic difficulty. Lawless highlighted that resilience depends on the underlying capacity of the economy and public services. She pointed to current constraints in housing, transport, water, energy, and healthcare, noting that these limitations reduce the flexibility needed to adapt when unexpected pressures arise.

Nat O’Connor, an assistant professor of social policy at University College Dublin and a panel member, addressed the financial tension between short-term needs and long-term planning. He stated that investment in long-term resilience costs money and creates a challenge for politicians who must manage the short-term political cycle. "There’s never enough money in the budget, there’s always people disappointed, and the politicians will hear all about it," O’Connor said. He suggested that the public needs better explanations on how these competing priorities are managed.

Caroline McMullan, who has worked on national risk assessments, urged for wider sharing of information regarding general risks. She cited the 2026 risk cycle, during which 404 risks were proposed by government departments and agencies, with 30 to 35 undergoing deep assessment. "It’s not that we’re scaring them if we tell them. I think they’d be more frightened if they think we’re not doing it," McMullan said. She added that the public wants more information and that the current work should be shared more broadly.

The discussion marked the final roundtable of the evaluation panel’s work programme. The independent assessment of the state’s handling of the pandemic is due to conclude by the end of this year.