The policy promoted by Taoiseach Leo Varadkar during the FG leadership contest of easing Ireland’s debt reduction target so as to provide more money for capital investment is irrelevant until 2023/24, according to a Dáil reply issued to Fianna Fáil’s Finance Spokesperson Michael McGrath TD.
Deputy McGrath commented, “As a candidate for the leadership of FG, Leo Varadkar, time and time again, highlighted how easing Ireland’s debt reduction target from 45% of GDP to 55% would enable the Government to spend much more money on capital investment. However, Ireland is not due to achieve the less ambitious debt target of 55% of GDP until 2023/24, according to new Minister for Finance Paschal Donohoe.
“The Fiscal Advisory Council has come out very strongly against easing the debt target saying that even sticking with the existing target of 45% ‘risks complacency’ and that such a target is equivalent to a 65% ratio when using a more appropriate measure than GDP.
“The Council has also pointed out that the Government breached the fiscal rules last year and plan on doing so again this year, risking sanction from the European authorities.
“Fianna Fáil has called on the Government to review the restrictive domestic policy rule which limits the role of Public Private Partnerships in our economy. This has the potential to deliver more capital investment into the economy much faster that the timeline involved in the Taoiseach’s plan to change the debt target.
“In addition, we believe the Ireland Strategic Investment Fund could and should be doing more to invest in critical infrastructure at this time. The Fund has a discretionary portfolio of over €8bn and has the potential to invest on a commercial basis in areas such as broadband, housing, renewable energy, public transport and road infrastructure.
“The Taoiseach and his government would do well to focus on how capital investment can be increased in the short term rather than talking about plans that are six or seven years away,” concluded McGrath.