Pandemic bonus unlikely to involve vouchers as budget day looms

Concerns in Government look set to rule out a voucher forming part of a Covid-19 pandemic bonus for frontline workers, with deepening doubts over whether a scheme can be approved by budget day.

Several senior Coalition sources poured cold water over the voucher idea on Wednesday, with one saying that while it could ultimately come back on to the pitch, for now it was a “non-starter”.

The logistics of rolling out such a scheme would cause issues, including the fact that it would have to be tendered for, given tens of millions of euro in exchequer funding would be involved.

There would also be issues around what would be done with any remaining unspent balance on the vouchers, sources said, with this often running to 4 to 5 per cent of the total received. On a purchase that amounted to many tens of millions of euro, the source said, the leftover sums could be significant.

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It is hoped that any bonus would be funded from the current year’s expenditure, but there is growing scepticism in the Government over whether the scheme will be agreed ahead of the budget on October 12th.

Sources said the chances of the matter being finalised within two weeks, while not totally ruled out, were receding. There is, however, a desire to bring some degree of clarity to the process before the end of the week.

‘Due recognition’

The Taoiseach on Wednesday said the issue of a bonus was “very challenging” due to the many groups seeking recognition for their work during the pandemic.

“It is very challenging and we will consult with social partners in this regard, in arriving at a situation that will be fair and give due recognition to an extraordinary effort all round in dealing with a once-off event,” he said.

The Department of Enterprise is understood to be examining a proposal for an extra bank holiday to mark the contributions and sacrifices of people during the pandemic.

Sources indicated it would probably need primary legislation, but drafting it would be regarded as complex. There would need to be a reasonable run-in time to allow employers to organise rosters.

While there would also be a cost to the public service in premium pay and to the private sector in lost productivity, some of this would be clawed back through increased spending on tourism and hospitality.

There are concerns in the Coalition over the nature and scope of the bonus scheme, especially if it were to focus on cash or a cash-equivalent.

Stimulus not needed

One source said that “the last thing we need is stimulus, everyone is spending money. Things that encourage consumer spending are not going to be deployed.”

There are also growing concerns over how divisive a scheme could be, with the potential for bitter recriminations over which workers were classified as being on the “frontline”.

“There is a risk, clear and present, of spending a giant amount of money and leaving people more unhappy than were before you tried it,” a Government source said.

The matter of the pandemic bonus was raised at a meeting between the Irish Congress of Trade Unions and Minister for Public Expenditure Michael McGrath and Minister for Finance Paschal Donohoe. It is understood that no agreement on how best to proceed was struck.

Mr Donohoe told reporters that the pandemic bonus must be fair and should also recognise the contribution that many have made.

“But it is also one that does need to be affordable,” he said. “The best way to move this forward now is an engagement we will have with stakeholders who are directly affected by it.”