May 30, 2024

Stability programme update paints picture of rosy economy – all we need now is a vision for society

  • FG & FF must not play fast and loose with tax base
  • Falling inflation must mean falling prices
  • Spending Ministers must signal end to ‘fiscal gimmickry’

Welcoming the late publication of this year’s Stability Programme Update, Labour’s Finance spokesperson Ged Nash TD said:

“The update paints a picture of a healthy economy which is on course to grow. Real wages are growing, alongside employment and inflation is falling. The exchequer surplus continues to grow, thanks to excess corporation tax receipts. What’s lacking amid the positive numbers is a real vision for society.

“For too many languishing on hospital trolleys and for those who cannot afford to buy a home, this rich country feels very poor.

“On housing, on health and on care, this government is failing.

“The commentary from Minister McGrath rightly warns us again of the dangers of relying on windfall business taxes to fund spending growth. At the same time, Fianna Fail’s first Finance Minister since they torched the country has pledged to go on a tax cutting crusade that risks narrowing the very tax base he is asking us to worry about.

“While there is scope to consider adjustments to taxes on labour as the economy continues to grow, this must be done responsibly. Why, two years on from its publication, has both FF and FG studiously avoided implementing any wealth-related tax measures whatsoever that were proposed by the Commission on Tax & Welfare?

“Taxes on non-productive wealth and assets need to provide a greater share of our taxes, but it seems that the two largest government parties have had enough of experts.”

He added:

“Labour supports the creation of both the new Future Ireland Funds and the Climate, Nature & Infrastructure Funds. We believe funds ought to be drawn down earlier than the government plans to assist with housing investment, the just transition, digitilisation and our ageing society. It’s time Sinn Fein provided a credible explanation as to why they voted against the legislation to set up of both funds last week.”

Deputy Nash continued:

“In 2023, real household incomes grew by 3% yet wages rose by 8.5%, the difference explained largely by price increases. The rate of increase in inflation is falling and there is a real onus now on government and regulators to be vigilant and to keep a watching brief on the big supermarket chains, utilities companies that charge among the highest prices in the EU and telecoms companies to make sure consumers get a fairer deal.

“2024 must be the year that ‘fiscal gimmickry’ is replaced by fiscal honesty. The lines between core and non-core spending have been deliberately blurred by Fine Gael and Fianna Fail. Low and middle income workers and those who depend on weekly social welfare payments cannot be left behind when the tide of so-called once-off payments goes out.

“The very need for significant rounds of once-off payments to help support low income households through the cost of living crisis is an acknowledgment that our social protection system does not even pretend to be a system that assures income adequacy.

“This is now the lens through which we need to consider Ireland’s social protection system. We need to provide an improved floor of decency and longer term security for everyone if we are to see an Ireland that works for all. For the first time in our history, this country can afford to plan for a better and more social democratic future, if we choose too.”

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