FF to seek 2:1 ratio in favour of spending over tax cuts in budget

Fianna Fáil will be seeking a two-to-one ratio in favour of expenditure over tax cuts in the October budget, party finance spokesman Michael McGrath has said.

He said the confidence and supply agreement with the Government ensured that last year’s budget was the first progressive one in many years, and it was a priority for the party that this trend continued.

“While the fiscal space is extremely limited by the carry-over effects of the previous budget and the possible extension of the Lansdowne Road agreement, we must continue to invest in the public services on which people rely on a day-to-day basis.’’

Mr McGrath was speaking during a Dáil debate on the Government’s summer economic statement which revealed scope for new spending and tax cuts would be slightly more than €300 million.

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He said housing must form a key part of the budget. “The housing crisis is a human tragedy for thousands upon thousands of our citizens. It is also now a major economic problem.’’

He said it was now clear the Government no longer planned to entirely phase out the universal social charge (USC). “This was never achievable or desirable.’’

He said Fianna Fáil’s agreement with the Government clearly stated USC reductions should place an emphasis on low and middle-income families.

Minister for Finance Paschal Donohoe said seven of every 10 jobs lost during the recession had now been recovered. "Many in this House said this would never happen, and, indeed, some still deny it has happened at all."

Jobs growth

Mr Donohoe said the latest employment figures showed jobs growth accelerated to 3.5 per cent year-on-year in the first quarter of the year, representing the addition of almost 69,000 jobs. He added that those increases were driven entirely by gains in full-time employment.

Mr Donohoe said the number of people at work had exceeded the two million mark since the second quarter of last year, and was now at its highest level since the end of 2008. The unemployment rate had fallen to 6.3 per cent in June, down from a peak of over 15 per cent in early 2012.

A recovering economy was not the same as a recovered society, he said. Acknowledging change had occurred was not the same thing as saying there was no need to make change in the future.

“Acknowledging and arguing that our society is strong is not to dispute the fact that our society is still scarred as a consequence of the horrific crash our country, economy and our people went through.’’