Budget 2019 must take account of key economic risks – McGrath

Published on: 06 June 2018

Fianna Fáil Spokesperson on Finance Michael McGrath TD has said the latest report from the Fiscal Advisory Council rightly highlights important risks facing the Irish economy and added that Budget 2019 is the right time to proceed with a Rainy Day Fund.

Deputy McGrath commented, “There is a lot of detail in the report published today and in the Working Paper on the Rainy Day Fund which I will study carefully. While the Irish economy is performing well, we cannot be blind to the obvious lurking risks in the form of Brexit, US trade policy, the high concentration of corporation tax receipts, changes in the ECB monetary policy, volatility in the Eurozone and pressures in the international tax environment. The Irish economy is particularly sensitive to changes in the external environment.

“Fianna Fáil accepts the need for more progress on Ireland’s underlying budget balance and supports the call for a credible plan for the management of the public finances over the medium term. It is evident that the risk of the economy overheating is a real one and we need to try to mitigate this risk while at the same time ramping up the delivery of new homes that our citizens to badly need. This is a tricky balancing act.

“IFAC has put forward a compelling case for the establishment of a Rainy Day Fund. While the Taoiseach was less than enthusiastic about this fund during the FG leadership campaign last year and others such as Sinn Féin are dead against it, it is clear when you examine the data that establishing such a fund is the right thing to do and now is the right time to do it.

“It is as certain as night follows day that the positive economic tailwinds we are currently enjoying will not last indefinitely. In the upcoming Budget Fianna Fáil will be focussing on the objectives set out in the Confidence and Supply Agreement.  We need delivery on areas such as housing, health, education and childcare and this must be done in the context of a prudent and sensible budget,” concluded McGrath.

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