Stability Programme Update highlights contradictory messages from Govt on economy – McGrath

Fianna Fáil Finance Spokesperson Michael McGrath has said there now appears to be two totally contradictory messages coming from Government in light of the publication today of the Stability Programme Update (SPU).

Deputy McGrath commented, “Since Christmas, the Taoiseach and a succession of Ministers have been telling the Irish people that tax cuts were now firmly back on the agenda. However in its official report on the state of the Irish economy and the outlook for the next few years, the Government now states that a €2 billion adjustment next year will leave the country just at its deficit target.

“The Government is factoring in a further slashing of public expenditure by 1.6% next year. The brunt of these cuts will inevitably fall hardest on families with children and people using the health service.  It is now clear that the suggestion of any sort of meaningful tax cuts for middle income families should be taken with a very large pinch of salt. Ministers appear to be motivated more by the desire to save Fine Gael and Labour Council seats than by a desire to give an honest assessment of the state of the economy.

“What is noteworthy in the report is that it projects a slowdown in the rate of job growth in 2014 and 2015. There is also a significant downward revision in the projection for the size of the economy. Nominal GDP is now expected to be €6bn lower in 2014 now than it was when last year’s SPU was published.

“Overall this document confirms the Government’s unambitious outlook for the economy. The Medium Term Economic Strategy published in December was very light on policy detail and failed to address the key challenges facing the economy including access to credit, weak domestic demand, the mortgage arrears and SME debt crisis, and the supports for the long term unemployed.”