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4 December 2008 Edition

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Government getting it wrong on economy at every turn

EXCHEQUER figures for the 26 Counties released this week showed a further decline in tax take with a €7.5 billion deficit and a €1 billion shortfall to date in the government’s projected figures for 2008.
The public finances are in freefall and the government is getting it wrong at every turn. If Finance Minister Brian Lenihan is incapable of correctly projecting income and expenditure how can people have any confidence that the government can deliver a roadmap for economic recovery? November is an important month for tax revenue as the coffers benefit from self assessment tax as well as the bulk of the year’s capital gains and corporation tax takes.
It is nearly two months since Budget 2009 was announced and we still have no idea how the Irish Government intends pulling the economy out of recession. It has not delivered a plan for job creation and has yet to explain how it intends to stimulate the economy.
Instead it has implemented short term cuts that will have long term, devastating effects on education and health. It has penalised working families with increased charges for public services and the 1% income levy.
It is strangling the retail industry, particularly small businesses along the border by increasing VAT to 21.5% at the same time as the British Chancellor has reduced the VAT rate in the Six Counties to 15%.
Sinn Féin was the only political party to advocate a 2% reduction in VAT in advance of the Budget 2009 announcement by the government in October. This was just one of the proposals the party said government needs to look at if it serious about stimulating the economy.
The only progressive way forward for the development of Ireland’s long-term economic future is for the process of an all-Ireland economic framework to begin. The harmonisation of VAT across the island would be an important initial step in beginning this process.
It is now clear to all that Fianna Fáil had no idea how to efficiently and effectively manage the economy in the good times with its policy of over reliance on consumption and the construction industry. It is also becoming clearer by the day that it has no idea how to get the economy out of the bad times.
It is time for the Irish Government to step away from its ‘slash and burn’ approach to the state’s budget and once and for all outline a roadmap for getting the economy out of recession while ensuring public services are protected.

An Phoblacht
44 Parnell Sq.
Dublin 1