Figures needed on size of Budget ‘One Off’ Measures
Responding to the publication of the Summer Economic Statement (SES), Labour Finance spokesperson Ged Nash called on the Minister for Finance to clarify how much will be spent on one off measures as these have now become a recurring annual feature of the Budget process.
Deputy Nash said:
“Today’s announcement of the proposed Budget allocations for spending and taxation are a fiction if the Ministers don’t also confirm how much extra they will allocate in so called ‘one off’ measures. We did not get the full picture today.
“Keeping the pre-budget guessing games going during the summer silly season might be worth its weight in gold to Ministers, generating acres of column inches over sham internal government fights in August but it’s no way to do transparent decision-making.
“This is especially true at a time when so many families are struggling to pay for the groceries.
“The SES provides €4bn for non-core expenditure on temporary measures covering humanitarian supports and Covid, but it is not clear if this will form the basis for a recurring annual set of bullet payments as we saw in winter 2022 and spring 2023.
“There is not much point in the government publishing a Summer Economic Statement if come October they will announce a further slush fund worth billions in extra funding for measures in social protection and energy supports. As we saw last October, over €4.1 billion of additional measures were announced.
“This is no way to properly plan the finances of our country if what you call one of measures become a permanent recurring features of the Budget process, where the big spending departments like Social Protection, Health and Education will be given billions extra.
“A bit of honesty about how much extra they plan to spend on social supports, energy payments and other measures would provide us all with some clarity.
“Nor has the government heeded the call from the ESRI, Central Bank and others that there is no objective rationale for big tax cuts in the budget as these will add further to inflation. Instead at least €1.1 billion will be spent.
“The case for workers on modest incomes who might get a small pay increase to not fall into a higher tax bracket is understood, but my fear is that the cuts this government has in mind will simply make the well-off, better off. If they insist on this approach it should be targeted at low and middle income earners rather than those earning the most, with a claw-back for those on the highest pay.
“Also, as has been highlighted by the Fiscal Advisory Council, capital investment has fallen as a proportion of overall government spending, needing to rise by €2.7 billion per year up to 2030 for a total of €19bn extra.
“The figures published today indicate only €2.25bn from windfall receipts will be used to boost capital investment from 2024 up to 2026 however only €250m extra will be invested next year.
“We have already seen the impact of inflation on building projects, most notably in the education sector where many school building projects were paused or delayed earlier this year. If the level of capital investment is not increased, then fewer homes, schools and hospitals than planned, and indeed other critical infrastructure, will be built.”