The Government’s medium term fiscal statement is “anti-jobs, anti-growth, and would not instil confidence in the public”, Sinn Féin’s finance spokesman Pearse Doherty has said.
Mr Doherty said cutting €750 million from the capital budget would mean the loss of 7,500 jobs next year. He said
the Government's acceptance that there will still be 390,000 people unemployed in 2015 is “not good enough”.
The Sinn Féin deputy was responding to Minister for Finance Michael Noonan’s announcement today that €3.8 billion of adjustments are to be made in the forthcoming budget, including €1.6 billion in tax measures.
Under the plan Mr Noonan said €12.4 billion will have to be saved over the coming four years. Of that, €7.75 billion will be made up of spending cuts, with the remaining €4.65 billion in additional tax measures.
Mr Doherty described the plan as “Fianna Fáil policies repackaged”.
Fianna Fáil’s Michael McGrath said the objectives and targets in the plan are “broadly in line” with those outlined by his party in last year’s National Recovery Plan.
But he said the “lack of any strategy for economic growth, job creation and restoring confidence is notably absent” from the statement.
“Without a clear and coherent plan for economic renewal, the task of achieving our public finance targets will be made all the more difficult,” he added.
And he said his party is “disappointed” with the level of detail in the statement.
“The Statement fails to provide the necessary certainty and clarity to consumers about how taxation measures over the next four years will affect them.”
Richard Boyd Barrett of People Before Profit described the plan as “economics of the madhouse,” which would “further cripple Ireland’s already devastated economy”.
The United Left Alliance TD said “sucking” a further €3.8 billion out of the economy would “inflict terrible suffering on working people, the poor and the vulnerable”. With growth forecasts being downgraded across the euro zone, the Government’s “delusionary hope of an export-led recovery is rapidly going up in smoke”, he claimed.
Business lobby group Ibec said while the scale of the adjustment is “about right”, the “excessive reliance” on tax increases would undermine future growth.
Director general Danny McCoy said the Government should do “much more” to reduce current expenditure over the next four years rather than rely on tax rises to meet its targets. “Further significant savings could have been made by eliminating waste and pressing ahead with meaningful public sector reform,"
he said.
Chambers Ireland said the Government’s priority must be to return the public finances to a sound position but an increase in Vat would not help this.
Chief executive Ian Talbot said he was concerned with the Government’s lack of commitment not to raise Vat in the upcoming budget. He said any increase would result in “reduced consumer confidence and in turn further declines in retail sales and possible job losses."
Nat O’Connor, the director of independent think-tank Tasc, said the Government had chosen the "wrong road" to recovery. "The stated plan to reduce spending by nearly €8 billion in total over the four years will inevitably mean the withdrawal of crucial public services - again impacting disproportionately on low and middle income groups,” he added.
The Construction Industry Federation was also critical of the decision to reduce the public capital investment programme by €750 million next year and by a further €550 million in 2013.
Director general Tom Parlon said the announcement was “regrettable” as the programme had already been substantially scaled back in recent budgets and had borne “too great a proportion of the fiscal adjustment to date”.