Fianna Fáil Spokesperson on Finance Michael McGrath has said that the government must heed the domestic and external risks to the economy set out in the Draft Stability Programme Update (SPU) published today.

Deputy McGrath commented, “It is encouraging that the Draft SPU reaffirms that the overall outlook for the Irish economy remains positive. The government needs to focus on the risks which have the potential to derail that favourable outlook, with particular attention on those risks that are within our control including housing policy, loss of competitiveness and the concentration of corporation tax receipts.

“The greatest risks lie beyond our control including the risk of a hard Brexit, international market conditions, the growth in protectionism, the impact of US tax reform and increasing geopolitical risks. The failure to identify efforts at EU level to introduce changes to the taxation of tech companies and to harmonise the approach to corporate tax strikes me as a key omission.

“Based on the projections in the Draft SPU, the government will miss the 2018 target of achieving the medium term objective (MTO) of a structural deficit of not greater than 0.5%. In the Budget introduced last October, the government predicted that the MTO would be achieved this year. It is disappointing that this key budget target is now likely to be missed and the Minister for Finance needs to explain the implications of this for budgetary policy.

“Two years ago, Fianna Fáil insisted that the establishment of a Rainy Day Fund would be a key commitment in the Confidence & Supply agreement. I welcome the fact the government intends to fulfil this pledge and plans to transfer some €500m into the fund from available fiscal space next year. Putting money aside for the next inevitable downturn is sensible economic policy and Fianna Fáil will insist this commitment is fully honoured in Budget 2019,” concluded McGrath.