Labour sets out its economic and fiscal plan for Ireland

12 November 2024

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I am pleased to welcome you all to the launch of Labour’s economic and fiscal plan for Ireland.

Our mission is to purse an economic agenda for social progress that works for all and builds better together, to reduce inequality and delivers good jobs and economic development in all parts of the country.

Today we are publishing that plan and alongside it that sets out a longer-term vision for Ireland, setting out the principles of a sustainable economic framework out to 2025.

Labour has identified seven fundamental challenges facing Irish society and our economy out to 2025, and one existential challenge – that of the climate crisis.

Despite the climate crisis being the greatest challenge facing the people and the planet, there’s been a shameful lack of vision when it comes to greening our economy. The fact that our national broadcaster is failing to put on a climate debate in advance of this election is shameful and neglects the fact that everything we discuss over these three weeks, the issues, the ideas, must be grounded in green principles.

Climate, alongside ageing, population growth; digitilisation, AI, security, global trade and the potential of an all-island economy are crucial to our economic plans.

These are the prism through which we plan to develop Ireland – its people and its economy.

With these challenges also come opportunities for good jobs, sustainable businesses and a more equal society.

We want to see 3 million people in work by 2030, with a labour market participation rate of 80%.

We cannot build the homes we need, the care we require or eliminate child poverty by the failed Fine Gael and Fianna Fáil approach of a frenzy of short-term tax cuts.

Have they not learned anything?

We cannot have it both ways. This country tried to pull that off before. Some in politics have short memories. We are still paying the price.

The same Ministers who rushed out statements warning of the risks of a Trump White House to Ireland’s economic model and our corporation tax and the income tax base want to buy voters off with tax cuts that they know fine well could be taken back in short order.

Labour is fronting up with the people. The choice facing voters on the 29th November is this; tax cuts or investment in the public services we all need.

They know it and we know it.

It’s time for honesty and frankness.

In setting out Labour’s fiscal priorities, on taxation Labour will;

  • Index tax bands and credits to make sure when you get a pay rise and when the cost of living goes up, you don’t pay any more tax than you did the year before. We will also index social welfare rates to protect the purchasing power of the pension and other payments
  • Reform the annual budget process with the cost of indexation and draft budget policy measures to be published in July, replacing the Summer Economic Statement. These Annual Resourcing Statements will bring more transparency to the Budget, end the annual summer kite flying this Government is renowned for, and we will move to a process of multi-year budgeting to better plan healthcare, education and public service provision more generally.
  • We will return the USC to the health contribution it started life as and ringfence the revenue raised, for the health service. The USC has a bad rep – the link to that actually helps fund needs to be clear.
  • It is dangerous to continue to narrow the tax base. We live in a very uncertain world. Labour will establish an independent Standing Commission on Taxation and Welfare to be more agile when it comes to tax, to closing down loopholes and to allow us to act when we need to in real time.
  • We are also very clear that public spending must be fully funded. We have set out in our document, with the support of the PBO, the fiscal implications of increases to net expenditure growth of 5.1% from 2026 would be and also an alternative annual expenditure ceiling of 6% annual growth. This includes additional capital spending from 2027 to reach and maintain 14.5% of total spending as capital, taking us back to the previous record levels of 2008.

We have not been afraid to set out how we would raise revenue to fund spending with an additional net €400m raised through a Spanish style wealth tax.

All of this is subject to negotiation and additional spending on desperately needed public service is urgent and a red line for us in Labour. We will be bound by the net expenditure limit which the next government will agree and have to submit in taking office. We will be ambitious and we must do what it takes on climate and housing bit we will be responsible too when it comes to the Medium Term Fiscal Plan.

In doing so, we will also reprofile the NDP for increased capital investment out to 2030 on housing, retrofitting, health and public transport.

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