Rainy Day Fund undermined again

Labour Finance spokesperson Joan Burton TD has said the news that IBEC also opposes the Government’s Rainy Day Fund shows it lacks economic coherence and credibility.

Deputy Burton said:

“The Labour Party has consistently opposed the concept of a Rainy Day Fund, saying the funds should be invested into affordable housing.

“The call today by IBEC that it should be directed into education is welcome, as it dovetails with what we have been seeking. We want additional funding directed at both education and housing. There is clearly a need for enhanced investment and diverting €500 million into the fund is the wrong choice at this point.

“We have repeatedly called for the State to take a more active role in the housing market by directly providing affordable housing, and Labour published proposals last week outlining how it would be achieved with a National Housing Development Bank.

“The notion of a rainy day fund has not been thought through. State finances do not work like those of a company or a household.

“The rainy day money has to go somewhere. Such a fund would be of no benefit to the real economy if it ends up invested abroad. Nor is it desirable for the Irish taxpayers’ money to be gambled on the stock exchange.

“It should therefore go into productive investment, and that means State-led capital and current investment in education, housing and other essential public services, now that it is at last financially possible to do so. Such spending would give us a social dividend as well as an economic benefit.”