Tanaiste must explain bizarre ‘Borrow to Save’ strategy
Tanaiste must explain bizarre 'Borrow to Save' strategy - The Labour Party
- Irresponsible use of windfall business tax gains to blame for ‘borrow to save’ plan
- Necessary spending rises must be paid for by sustainable, reliable taxes
- Honest debate on tax cuts and spending is urgent
“A household or a small business would never borrow to save, and neither should the State,” Labour’s Finance spokesperson Ged Nash has said.
“Today’s Irish Fiscal Advisory Council correctly calls into question the government’s bizarre strategy of borrowing to put money into the two savings funds. The simple truth is that the NTMA would not have to take this approach if the windfall corporation tax revenue from the last few years was deployed more responsibly.
“The plan was to use these unreliable revenues to plan for the future needs of the country – an ageing population, climate adaptation and a cash cushion to end the boom and bust. This is why Labour decided to back the creation of the Future Ireland Fund and the Climate, Nature and Infrastructure Fund.
“Instead, the bulk of the cash is being used to hike spending. Labour has been very clear. Spending on education, health, childcare and all of the other services on which we rely is below that of comparable countries and this rich country needs to catch up.
“However, it is not prudent or responsible to be using a very high proportion of taxes that could disappear overnight to build those services. It seems to me that this government is either unwilling or unable or learning from the mistakes of the recent past.
“Necessary spending rises need to be funded by a sustainable, reliable tax base. We cannot fund schools, hospitals and early years, and make this country more affordable and therefore competitive, if we decide to continue to simultaneously grow spending and narrow tax base by throwing out ill-conceived and economically dumb tax breaks for burger barons and big builders.
“It is high time we had a serious and informed dialogue in this country about how we tax, who we tax, how we spend, and why. It is clear that once the corporation tax receipts keep gushing in, this is a conversation Fine Gael and Fianna Fail are not prepared to have. For a decade and a half, Finance Ministers have gotten their forecasts on corporation tax, wrong. This is a real illustration of the way in which this government is playing with fire.”