Global uncertainty should force government to take €500 million tax cuts pledge off the table
- SPU process a form of ‘guesswork’ against backdrop of war on Ukraine
- Government should drop tax cuts plan which favours better-off
- Bulk of available resources should be used for targeted cost of living measures and public investment
Labour Finance spokesperson Ged Nash has tonight (Wednesday, 13th April) said that the uncertainty surrounding the public finances should force the government to drop their pledge for a further round of tax cuts in the next budget.
Welcoming the publication of the Stability Programme Update (SPU) Deputy Nash said:
“Taken together with the quarterly exchequer returns published last week, the SPU presents a snapshot of an economy that is performing relatively well. Even in the context of the war in Ukraine, the economy is set to continue on a healthy growth trajectory. Employment will continue to grow and the deficit is likely to be much lower than forecast when Budget 2022 was unveiled.
“However, the SPU estimates that even maintaining existing levels of public services in the context of an ageing population will add €7billion to State spending out to 2030.
“Last October, the government decided to spend €500million cutting taxes. This measure overwhelmingly benefitted the best paid and those less reliant on public services. They plan to do the same thing this year, despite the warnings of the Fiscal Advisory Council and other independent experts.
“The pressures faced by low and middle income households would be better addressed by using the available resources to invest in genuinely free education, access to GP care for all children and widening the threshold for fuel support to help those who are on modest incomes meet the cost of heating their homes.
“Amid the global economic uncertainty we are now experiencing, the government’s plans to slash taxes again in autumn’s budget must be revisited.”