Damning IFAC budget report shows Fianna Fáil’s old tricks are back

07 December 2023
  • Price of tax cuts and poorly targeted giveaways will be paid by less well off as inflation will remain high for longer

Labour’s finance spokesperson Ged Nash has described the Irish Fiscal Advisory Council’s post-budget analysis as the body’s most damning to date.

He said the report is so scathing it demands a detailed and formal response from the Minister for Finance.

Deputy Nash said:

“IFAC has taken the gloves off and alarm bells should be ringing in government.

“The expert body has provided compelling evidence that proves the Labour Party’s analysis – Budget 2024 was poorly targeted and will as a result add to the inflation woes that will be most acutely felt by those on low and modest wages and incomes.

“Minister McGrath courts the appearance of fiscal responsibility. The evidence from the IFAC is damning and suggests otherwise.

“At a time when the heat needed to be taken out of the economy, Fianna Fail went back to its old playbook – backed up by the Taoiseach – that you can cut taxes for the better off, spend more and grow the economy at the same time.

“IFAC concludes that this approach in Fianna Fail’s first budget since the crash will end up adding almost 1% to inflation next year. Lower income households can ill afford this added burden.

“IFAC assesses that the income tax cuts alone will add anything between 0.5% to 1.8% in inflation over the next two years. This is a case of those who can least afford high prices paying the price for cuts to taxes that will benefit higher earners the most.

“In Budget 2024, Fianna Fail gave us performative tax cuts at a time when we need performing public services. It’s outrageous.

“The Council’s warnings must not be subject to the arrogant dismissal that has become a speciality of the Taoiseach’s.

“There is a very real risk that Ireland is heading towards yet another boom-to-bust moment. The economic and fiscal position, while nowhere near the 2008 scenario is not as benign as some in government would have it.

“While we are somewhat sheltered from a moderate downturn by the current cash pile of colossal business tax receipts and our debt-to-GDP ratio is lowering, the fundamentals of the economy are not sound. The risks are clear and have been pointed out ad nauseum by the Minister for Finance.

“I agree with IFAC that Ireland needs a ‘serious fiscal framework’ and it should be one that is honest and commits to targeting public spending and productive investment to the parts of our society and economy that need it most – housing, climate and robust public services.

“We cannot repeat the mistakes of the recent past.”

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