3 July 2008 Edition
Government has no strategy as recession bites
THE Irish Government this week published exchequer returns for the first six months of 2008. The fact that they show a shortfall in public finances is a cause of major concern. While many people expected tax receipts to be down, the extent of the drop for the six-month period is stark.
There now needs to be a clear focus on protecting public services. There must be no increase in stealth taxes which would hit those on lower incomes (already baring the brunt of the rising cost of living) hardest.
The Government bears considerable responsibility for the current situation.
For short-term electoral reasons the Fianna Fáil-led government cut income and other taxes to levels which are not sustainable allowing the Exchequer to become precariously over-dependent on revenue related to construction and consumption.
This is the reason that the 26 Counties has seen a collapse in public finances to an extent not seen in any other European states open to the same international economic circumstances.
The Government ignored warnings that revenue from construction and consumption was wide open to fluctuation.
It ignored the fact that with an over-inflated property sector the amount of revenue coming in from this sector was unsustainable.
Unfortunately there is also every reason to assume that the revenue from consumption taxes will continue to contract in the months ahead.
The answer to this situation is not cutbacks nor increasing stealth taxes and charges. If the state requires extra revenue to fund essential public services then that revenue must be raised in a fair, transparent and accountable manner with the burden falling on those who can afford to pay.
The government must also ensure that value for money is achieved in all government spending – a fact that has not been the case to date. It needs to rebuild public confidence in its ability to mange the public finances.
Sinn Féin believes that the government’s key priorities at this time must be to:
• Protect the incomes of those on low and middle incomes
• Ensure no cuts to key public services
• Ensuring value for money is achieved in all public spending
• Ensure job losses are stemmed and new jobs are created
• Ensures the delivery of public infrastructure projects by funding these through borrowing.
What is needed now is for the government to restore public confidence by outlining its economic strategy to bring us out of the current economic and fiscal difficulties.
There now needs to be a clear focus on protecting public services. There must be no increase in stealth taxes which would hit those on lower incomes (already baring the brunt of the rising cost of living) hardest.
The Government bears considerable responsibility for the current situation.
For short-term electoral reasons the Fianna Fáil-led government cut income and other taxes to levels which are not sustainable allowing the Exchequer to become precariously over-dependent on revenue related to construction and consumption.
This is the reason that the 26 Counties has seen a collapse in public finances to an extent not seen in any other European states open to the same international economic circumstances.
The Government ignored warnings that revenue from construction and consumption was wide open to fluctuation.
It ignored the fact that with an over-inflated property sector the amount of revenue coming in from this sector was unsustainable.
Unfortunately there is also every reason to assume that the revenue from consumption taxes will continue to contract in the months ahead.
The answer to this situation is not cutbacks nor increasing stealth taxes and charges. If the state requires extra revenue to fund essential public services then that revenue must be raised in a fair, transparent and accountable manner with the burden falling on those who can afford to pay.
The government must also ensure that value for money is achieved in all government spending – a fact that has not been the case to date. It needs to rebuild public confidence in its ability to mange the public finances.
Sinn Féin believes that the government’s key priorities at this time must be to:
• Protect the incomes of those on low and middle incomes
• Ensure no cuts to key public services
• Ensuring value for money is achieved in all public spending
• Ensure job losses are stemmed and new jobs are created
• Ensures the delivery of public infrastructure projects by funding these through borrowing.
What is needed now is for the government to restore public confidence by outlining its economic strategy to bring us out of the current economic and fiscal difficulties.