FG must stop acting reckless with public finances

Speaking in response to Taoiseach Leo Varadkar’s comments on the forthcoming Budget, the leader of the Labour Party, Brendan Howlin TD, called on Fine Gael to stop acting recklessly with the public finances.

Deputy Howlin said:

“This current set of Fine Gael ministers has not yet proven itself capable of making good decisions to manage the economy and public finances prudently. The serious cost overruns in the National Children’s Hospital, metro and rural broadband could have been avoided if the Department of Public Expenditure had continued to play a robust role as an overseer of spending in every department, as it did following the last economic crash.

“The Fiscal Advisory Council have pointed out Fine Gael’s loss of control of public spending on projects, but also that they are not planning spending to meet the needs of Ireland’s growing population and they are not planning adequate fundraising measures to counterbalance spending commitments.

“Labour is now the only political party that has a solid reputation on managing the public finances. Not only did Labour’s actions reduce the national debt and deficit, but Labour also increased spending where it was most needed and the worst kind of poverty, material deprivation, fell by a third during Labour’s time in government.

“The Taoiseach has rightly acknowledged that there does need to be spending increases in a range of areas. In our view, this includes more funding for home help, providing secondary schools where they are needed, pay restoration in the Defence Forces and continuing to roll out primary care health centres to serve our ageing population. This requires a hard look at tax breaks and certain business grants that make little sense when we have full employment and a growing economy. There is a need to re-focus many business supports on the specific risks associated with Brexit.

“The Taoiseach’s continued advocacy of income tax cuts for the top 20% of workers runs totally counter to good public management, and is out of step with the risks ahead as Brexit and turbulence in global trade are inevitably going to rock the Irish economy. In proposing tax cuts, Fine Gael are prioritising the next election over the future of the country.

“The Taoiseach will find his party in an isolated place in the run up to the General Election and afterwards if he continues with this approach. A sustainable taxation base is one of the key lessons from the economic crisis. Playing politics with income tax reductions is what got us into this trouble in this first place. I have made it clear since becoming Labour Leader that I do not believe that tax cuts are either wise or prudent. 

“The Fiscal Council’s report is worthy of debate. These are not tablets of stone. This week the state borrowed money at practically no cost at all. The Government’s assertion that capital spending is increasingly significantly more than current spending is a fair one. The Taoiseach’s remarks over the weekend are at odds with those of the Minister for Finance.

“But it is his insistence on a Thatcherite policy of tax cuts for party political advantage in the run to up an election will serve neither the country’s interest of even that of his party.”