Budget cuts 'may cost 30,000 jobs'
Up to 30,000 jobs could be lost through government cuts in the Budget, an economic think-tank has warned.
Researchers claim plans to take €3.5 billion from the economy in December by cutting key services and income protection for low earners could have dire consequences.
The Nevin Economic Research Institute (Neri), which was set up in March and is funded by trade unions, said the State could instead shore up €1 billion by increasing taxes on high earners and wealth groups.
Think-tank director Tom Healy said it was possible to adopt an alternative budgetary strategy that would still meet the terms and targets set by Ireland’s debt masters, the troika of the European Commission, the International Monetary Fund and the European Central Bank.
“The choice between taxes and spending is ours to make,” said Dr Healy, ahead of the publication of Neri’s latest quarterly report.
“Most people have already taken enough in cuts to public services and wages along with increased charges. What we need instead is a strategy that invests in growth and begins to address the huge shortfall in taxes paid at the very top end of the income distribution.”
In its latest report, Neri said the Government’s austerity strategy was failing and that introducing a stimulus instead of making cuts could create more than 20,000 jobs.
It said existing austerity measures could risk 30,000 positions.
The think-tank suggested maintaining 2012 spending levels, reversing capital spending cuts and introducing a wealth tax.
It recommended the Government scales down its adjustment plans from €3.5 billion to €2.7 billion - €2.3 billion of which would come from its proposals for higher taxes on the wealthy.
It added that investing in infrastructure and job creation would be key to getting the country back on its feet.
“Such a strategy is not only equitable but also makes economic sense,” Dr Healy said.
“In our Quarterly Economic Observer, we show how our proposals are likely to result in 21,000 more jobs than under the Government’s proposed consolidation - while still meeting the Troika’s deficit target.”
The Government will announce the 2013 Budget in the first week of December.