POLITICAL REACTION:THE GOVERNMENT'S four-year fiscal plan has been severely criticised by the main Opposition parties.
Fianna Fáil’s finance spokesman Michael McGrath said he was hugely disappointed at the level of detail, given its billing by Minister for Finance Michael Noonan as a document that would give certainty to taxpayers of what was in store up to 2015.
“The Government is again not clear on the issue of possible future income tax changes. Its commitment not to increase income tax over the lifetime of the Government has been heavily qualified in this document,” he said.
He also criticised what he said was its focus on raising significant amounts through indirect taxation. “This will only cause further uncertainty and a reluctance to spend in the domestic economy.” Mr McGrath said.
He also said job-creation measures were completely missing from the plan. “Fine Gael and Labour promised a jobs budget, then whittled it down to a jobs initiative that they raided pension funds for. This plan indicates that they have abandoned their own targets and their promises to voters.
“The truth is that the number on the Live Register is higher today than it was when the Government came to office,” he said.
He expressed particular disappointment at the €750 million cuts in capital spending next year. “It’s an easy political choice that will do long-term damage.”
His Sinn Féin counterpart Pearse Doherty echoed that criticism. He said the capital budget cuts would result in the loss of 7,500 jobs next year.
He also said the prospect of 390,000 people remaining in the dole queues at the end of 2015 was “not good enough”.
“This is an anti-job, anti-growth plan that will not instil confidence in the public.
“It is little more than Fianna Fáil policies repackaged. It begs the question: what was the point of the general election if Fine Gael and Labour had no policies of their own to implement?”
Joe Higgins of the Socialist Party said the budget was a continuation of the “same savage austerity” of the previous government.
“There are further attacks on living standards. The cut in the capital budget is particularly serious in light of the need for investment.
“Austerity kills economies. Unemployment increases. People should say stop, we want an end to it, to stop paying bondholders, to start investing in people and jobs,” he said.
Richard Boyd Barrett of People Before Profit portrayed it as the “economics of the madhouse”.
“It will further cripple Ireland’s already devastated economy and inflict immense suffering on working people, the poor and the vulnerable,” he said.
Siptu president Jack O’Connor said the Government strategy was the wrong approach and would not succeed in achieving the jobs and growth needed for recovery.
“This is the wrong approach. It will not provide the necessary impetus for growth. While the EU-ECB-IMF troika is dictating the terms, there is a need to leverage as much into the economy as is taken out in the December budget,” he said.
Mr O’Connor added that the balance between cuts in public services and tax increases, while an improvement on the previous government, did not sufficiently transfer the burden to those most in a position to pay.
“There is more scope for taxing the rich while the reductions in public expenditure should be implemented in such a way that the wealthier sections of society carry more of the burden.
“Essentially, there is a need for a strategy that involves investment for jobs and growth, leveraging money into the economy without compromising the national finances.”
Gail McEvoy, president of the Institute of Certified Public Accountants, said it was regrettable there had not been a more even split between increased taxation and expenditure reduction in the fiscal plan.
“The Government should be looking to achieve a greater alignment of our expenditure to our income, rather than putting an additional burden on hard-pressed taxpayers,” Ms McEvoy said.
“Given the continued lack of consumer confidence, the Government also needs to carefully consider how any VAT and excise duties will be implemented so as not to deflate consumer spending further,” she added.