As it makes choices concerning Budget 2021, the Government must recognise and acknowledge three imperatives.
First, that the primary focus should be on increasing employment and delivering services, not on reducing the deficit.
Second, that a huge amount of borrowing will be needed in the next three years, and probably more again after that.
Third, that this borrowing is affordable and is the correct thing to do for the future of the economy and society.
The Irish Fiscal Advisory Council has recognised that Ireland is faced with the "exceptional circumstances" outlined in the Stability and Growth Pact (SGP), while the European Commission has activated the 'general escape clause' of the SGP.
When combined with the extremely accommodating policies of the European Central Bank, this provides Ireland with the substantive policy space to implement a fiscal policy focused on sustaining demand and incomes, rather than targeting an arbitrary debt or deficit number.
We must use that space over the next three years to not only restore the demand for labour, but to address social and infrastructure deficits, to strengthen the economy and to protect the environment.
Over the longer term, Ireland should engage with the EU Commission, who acknowledged in February that the fiscal rules are not predictable. The rules should be revised so people, the environment and the economy are priorities.
This does not mean that we borrow over the long-term to avoid broadening the tax base and increasing the total tax take. We need to do both of these, but not simply to reduce the deficit or the debt.
Rather, we should see the present situation as a welcome opportunity to refocus on preparing Ireland for a post-carbon world.
We live in a unique moment characterised by three immediate challenges: the spread and impact of Covid-19, the persistence of poverty and inequality, and the degradation of our environment.
The national effort to address the pandemic has cast a sudden spotlight on many aspects of Ireland's social and environmental fabric that have been neglected in many ways in recent years.
Those most vulnerable to the pandemic have been those with least power and influence in our society. Those on the frontline carrying out essential work have been those who are often paid the least for work which matters the most.
That neglect may have been unintended. But now that it has been revealed, there is no excuse for leaving it unaddressed. Despite significant economic growth over most of the past decade, our financial system has been protected and reinforced even as our housing system has failed and homelessness has grown; poverty and inequalities in wealth, power and income have not been reduced sufficiently or effectively; and our natural environment has been seriously degraded while we failed to address the climate crisis.
In confronting the impact of Covid-19, we must not only tackle the immediate consequences of the measures necessary to suppress the virus - record unemployment, a collapse in domestic and foreign demand, and a subsequent collapse in income and expenditure - but must take the steps necessary to reform all those structural features of our economy and society that perpetuate poverty and destroy the environment.
To do so, Budget 2021 must:
:: Outline a three-year stabilisation programme targeted at supporting incomes, restoring demand for labour, and sustaining strategic firms and institutions; and,
:: Commence the major economic and social reforms that we need to meet the United Nations' Sustainable Development Goals and address the deep structural challenges of poverty and inequality that confront us.
The approach Social Justice Ireland is proposing will require Ireland to borrow, which will see the national debt grow.
Less important than the absolute level of debt, however, is the ratio of debt to the size of the economy and the cost of servicing that debt. Competent investment of borrowed money should see debt ratios maintained or even falling. The additional servicing costs would be negligible, as Ireland's borrowing costs remain at historic lows.
Social Justice Ireland's message on Budget 2021 is simple: Lock in this cheap money for as long a timeframe as possible; do what already needed to be done on poverty and social inclusion, housing and health, the Just Transition Fund, and other infrastructure investment; and park the costs as cheap borrowing to be run down over a long period of time.
During the last economic crisis, Ireland's austerity approach led to insufficient investment in social services, such as childcare and education, and in infrastructure such as social housing, public transport and rural broadband.
Investment is essential for a number of reasons: a) to secure economic development; b) to protect communities (with initiatives such as Community Healthcare Networks); c) to keep unemployment as low as possible (with initiatives such as childcare programmes); d) to ensure critical infrastructure deficits are addressed; and e) to tackle climate change, and ensure that the transition to a low-carbon economy is just and fair.