Varadkar not concerned over ‘pandemic bonus’ impact on budget

Tánaiste Leo Varadkar has said he is not concerned that the cost of a "pandemic bonus" could threaten his party's plans for a tax and welfare package in the upcoming budget.

He also said the Government is exploring the possibility that tax credits, along with an extra bank holiday, could be used to reward retail staff for their work during the Covid-19 emergency.

Mr Varadkar said a mooted extra bank holiday would also be linked to remembrance of the more than 5,000 people who died from Covid-19 in the Republic.

Mr Varadkar, the Minister for Enterprise and Trade, made the remarks during a trip to Washington DC where he is meeting his Biden administration counterparts and promoting Ireland as a location for investment.

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Health workers and gardaí have sought inclusion in any pandemic bonus scheme and Mr Varadkar suggested last week that the wider Civil Service should benefit too.

Minister for Public Expenditure Michael McGrath has warned that the cost of a bonus for all public sector workers in the shape of two weeks’ extra holidays could cost in excess of €1 billion.

Asked if he has any concern that Fine Gael’s wish to see tax and welfare packages included in the budget could be threatened by the cost of a pandemic bonus, Mr Varadkar replied: “No, I don’t.”

He said: “I think if there is going to be a pandemic bonus – and I think there should be – it’s likely to fall into this financial year in terms of cost . . . It would ideally be paid before the end of this year, therefore would not impact on the budget for next year.”

Asked where the money is coming from, he said: “Thankfully we’re doing better than we thought we’d be doing at this point in the year.

“If you go back to the Summer Economic Statement we anticipated that spending would be higher and that tax receipts would be lower.

“So, you know we’re ahead of where we thought we would be, and that gives us a small bit of flexibility for the rest of the year.

“But at the same time we’re still in deficit and we need to bear that in mind too.”

Senior Government figures including the Taoiseach have suggested that retail workers could be included in plans for a pandemic bonus for frontline staff.

Mr Varadkar said some retail workers have already been paid extra by their employers because they needed the staff and wanted to reward them.

He said: “It is difficult for Government to pay bonuses to people in the private sector. We can do that quite easily for people who are in our employment in the public sector.

“For the private sector, it is more complicated. So we’d have to think of other ways of doing that.”

Extra bank holiday

He said one idea under consideration is an additional bank holiday and “other ideas under consideration, for example, are things around tax credits”.

“But all those things are now only under discussion and we haven’t come to a conclusion yet,” he said.

Mr Varadkar said no date has been set for the extra bank holiday yet. Asked if it would be before Christmas, he said: “At this stage no decision at all about dates. It may even require primary legislation so that needs to be borne in mind too.”

He said the idea of an additional bank holiday would be for two reasons, the first being remembrance of the deaths of more than 5,000 people in Ireland during the pandemic.

Secondly, it would be a way of recognising volunteers as well as workers “who made a significant effort during the pandemic”.

“Options are being considered – pros and cons, costings, all those things – not decided in any way at this stage,” he said.

Asked if it could be November around the time of the Thanksgiving holiday in the US, Mr Varadkar said: “If we do it we’d want to give people maybe a bit of notice because people may wish to make plans . . . at this stage it [the date] is a matter under consideration.

“It’s not decided, and there’s been no discussion, certainly not at Cabinet level, about dates.”