Exchequer returns show need to invest

Labour Finance spokesperson Joan Burton TD has said that the half year exchequer returns show the need to continue to invest in social services and infrastructure to protect Ireland from the impact of any future downturn.

Deputy Burton said:

“The latest figures show revenue for the year on track, but once again corporation tax receipts continue to exceed profile. Questions must be asked about why this continues to be the case, and why these increases are not being correctly profiled?

“There are rightly concerns about the use of these revenues to pay for permanent spending increases. However Labour is arguing for these to be used to fund capital investment to provide the infrastructure and skills we need to ensure the economy can continue to grow.

“Ireland faces many challenges, most especially on housing, but also in ensuring our schools and hospitals are fit for purpose. Using buoyant corporation tax receipts to address these deficits is the prudent course of action.

“Investing in skills and education also boosts the long term growth prospects of our economy, and ensures our people are equipped for the modern workforce.

“I am concerned at how VAT might now be affected by cross border shopping and activity, and with the UK to exit the EU next year this must be closely monitored.

“The likely future changes to how digital services are taxed across Europe; the move by Italy to more flat tax structure; the ongoing reforms to the US tax system, and the impact of a possible trade war highlights Ireland’s vulnerability.

“Therefore the best way to protect ourselves is to invest for the future, in our productive capacity, but also by working to resolve deficits in social services. For example, affordable childcare is now essential if we want to encourage more parents to stay in the workforce and when over 700,000 people are on waiting lists we should be increasing the capacity of our health system.”