independent

Sunday 20 April 2014

As Budget looms, clear message is that people deserve a break

IRISH people's austerity fatigue is justified and heartfelt – but weariness of harsh medicine is not the best argument for a change to less onerous economic remedies. With Budget Day almost two months early this year, those political Budget kites are flying all the earlier. The original plan was for a €3.1bn austerity package in terms of cutbacks and extra taxes for 2014.

But government advances on bank debt terms have left some €600m leeway on that package. Assuming they can fend off pressure from the troika not to scale back austerity, the next question will be how to allocate this new-found "leeway''?

All signs so far are that the debate is breaking down along predictable lines: Labour wants to mitigate the proposed €440m in welfare cuts; Fine Gael wants the vast bulk of the money to go on job creation projects.

A new economic report published yesterday by Merrion Stockbrokers may be used to buttress Fine Gael's line of argument. The study states there will be no economic growth in the Irish economy this year, with spending and investment shrinking.

The report adds to the growing clamour in Ireland and throughout the EU for easing austerity – mainly because austerity is further dampening economic activity.

There will be no great surprise that the study backs the employers' group, IBEC, in seeking an easing of the tax burden on business in Mr Noonan's Budget, due on October 15.

It is very clear that the working people of middle Ireland have done vastly more with a heck of a lot less for the past five years.

They need and deserve a break – and such a break would in fact offer more hope of a pathway out of recession.

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