Enterprise and reducing business costs need to be at heart of Budget 2012
Fianna Fáil Finance Spokesman Michael McGrath has responded to the economic outlook from the employers’ group IBEC which shows that the tough decisions implemented by the previous Government were necessary and are working.
Deputy McGrath said: “With tentative growth returning to our economy this year and forecasts of improved growth conditions next year, there are clear signs that the necessary adjustment in the economy is bearing fruit and that Ireland is trading its way out of recession. Putting their bitter rhetoric aside, FG and Labour’s commitment to implement the budget measures they trenchantly opposed last December is also correct and the economy will benefit from the relative stability that we’re seeing in the public finances.
“There are concerns raised by IBEC which I would share and have raised with Minister Noonan in the past. The Minister has been preparing the ground for a budget of spending cuts and tax increases over and above the €3.6bn that was earmarked for Budget 2012. This is despite the fact that the interest rate reduction on our EU loans agreed at July’s Eurozone summit will yield savings of €400-500m in 2012.
“It must be borne in mind that over €20 billion of fiscal adjustment has been implemented in our economy since 2008. This has had inevitable negative consequences for the domestic economy but was necessary to put the public finances on a sustainable path. While austerity now seems to be flavour of the month in Europe, the truth is that Ireland has done more to bring its public finances to order since 2008 than any other Eurozone country. In Ireland, Europe’s battle cry for more austerity needs to be seen in that light.
“It is also true that any economy and society can only take so much austerity and I would caution the current Government on the grave risks of going beyond the austerity envisaged for 2012. On top of continuing to develop our successful export sector, our Government needs to work proactively to bring down the cost of doing business in Ireland.
“Local authority rates, energy bills, waste disposal costs and cost of compliance are, amongst many other costs, a real drag on the performance of the SME sector. Instead of imposing greater than necessary austerity on our economy, the Government should have enterprise and reducing the cost of business at the heart of Budget 2012.”