Summer Economic Statement promises little, and will deliver less

The publication of the Summer Economic Statement promises little to the people of Ireland, and will deliver even less, according to Labour leader Brendan Howlin:

“Over recent days and weeks, we have heard much about Fine Gael’s ongoing commitment to reducing taxes, and increasing welfare payments and public spending.

“The Summer Economic Statement published today shows all of that to have been empty, as it emerges that the Government does not even have enough current funding available to pay for the extension to the Landsdowne Road Agreement, let alone anything for pension increases, reducing class sizes, or investing in healthcare.

“The revised figures published today suggest that Budget 2018 will contain €140m of current spending increases, €180m of capital spending increases, and €220m of tax cuts*.

“However, as the document notes, the implementation of the revised public sector pay deal will cost €180m next year – more than the current funding available.

“For any Budget to become possible, Minister Donohoe will need to ditch any idea of tax cuts being possible this year, and admit that the €220m earmarked for that purpose will need to be used to provide some very limited investments in education and in healthcare.

“The €180m available for capital spending is also woefully inadequate for next year. And the continuing determination to put half a billion euros on deposit each year from 2019 onwards at a time of near-zero interest rates is completely daft at a time when we urgently need further capital investment – most notably in housing.

“Last year, there were two movements in the fiscal space. “In the first instance the space was upped by €500m to 1bn. At that stage, I specifically asked whether further adjustments possible and was told by Ministers Donohoe and Noonan that they were not. Yet on budget day a further €200-250m appeared.

“It remains to be seen whether the figures published today will bear any resemblance to reality on Budget Day, but for now, the odds of this Government passing a Budget at all seem slim.

“Minister Donohoe is of course right to talk about the size of the overall Budget. But in truth, unless he is willing to axe entire spending programmes, he won’t find much in the way of savings in a system that has been stretched to breaking point over recent years.”

ENDS
* Table 2, Page 21, Summer Economic Statement 2017