Today’s Summer Economic Statement is another squandered opportunity by the government to deal with the enormous pressures facing our economy and society, the Social Democrats said today.
The party’s co-leader Róisín Shortall TD said the setting up of a Rainy Day Fund at a time when the housing, health and childcare needs of so many people are going unmet shows that the government’s priorities are all wrong.
Deputy Shortall said:
“The Minister for Finance has set up a Rainy Day Fund with €1.5bn earmarked for it over three years from 2019. But why are we even talking about a Rainy Day Fund when we have 4,922 adults and 2,777 children waking up in homeless accommodation and others are being moved into communal hubs instead of family homes? It makes no sense to establish such a fund when our health system is on its knees and the country faces EU environmental fines due to the lack of investment in transport alternatives and energy efficiency.
“Today’s economic statement is another squandered opportunity for the government to reduce the cost of living through investment in public services such as housing, health and childcare. We believe that by investing in these services and initiating several measures to reduce key costs faced by families, Government can have a much greater impact on living standards. Investing instead of saving will save us money in the medium term.”
Deputy Shortall said the Social Democrats favoured budgetary measures including:
- A phased increase in the VAT rate for the hospitality sector to bring it back to 13.5 per cent. The special VAT rate of 9 per cent has served its purpose – tourism in Ireland is booming and last year a record 8.8 million overseas visitors came here. Increasing VAT on the hospitality sector would free up €600 million a year. These resources could be spent in a much more targeted manner to support small businesses and invest in public services.
- Investing in health care reform by funding the fully-costed Sláintecare plan produced by a special cross-party Oireachtas committee in May 2017. According to the committee’s detailed costings, a total of €350-€400million will be required each year over a ten-year reform period to expand the package of entitlements that will be available to all. The lower-cost model of healthcare outlined and resultant improved health outcomes will ultimately result in lower costs to the taxpayer.
- Funding measures to address the acute shortage of houses, including over-the-shop premises, the introduction of an Affordable Housing Scheme and measures to free up vacant sites for housing developments.
Commenting on the details of today’s Summer Economic Statement, Deputy Shortall added:
“The government is presenting its proposals as a boost for capital investment, but what it is setting out is really a drop in the ocean compared to what is needed. Capital spending sank to appallingly low levels during the austerity years and that is exactly why we now have a crisis in housing and childcare and health.
“The paltry amount devoted to capital investment in today’s statement lays bare the government’s huge mistake in not earmarking any of the estimated €3bn proceeds from the sale of AIB shares for infrastructure projects. The government is making the same mistake now by promising further cuts to income taxes which will erode the tax base even more.
“It is clear that the EU’s fiscal rules are completely inappropriate for Ireland’s economic situation and are damaging the management of the economy. There is no evidence that the government has even challenged these, and without some kind of breakthrough we aren’t going to deal with the severe under-investment in capital spending.”