Saturday 3 December 2016

Editorial: Uncertainty over Budget plans is damaging recovery

Published 17/06/2014 | 02:30

Minister for Finance Michael Noonan and Brendan Howlin Minister for Expenditure and Public Reform. Frank McGrath
Minister for Finance Michael Noonan and Brendan Howlin Minister for Expenditure and Public Reform. Frank McGrath

The danger in raising expectations is that if you don't fulfil them you leave the people who believed your promises very angry. The Labour Party can vouch for that and its Fine Gael partners in government are in danger of treading this dangerous path again by raising expectations that there will be comfort for ordinary taxpayers in the October Budget.

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Not so says the Fiscal Advisory Council, a body established by the Government to assess how it is dealing with budgetary targets. Yesterday it backed a European Commission report saying that failing to take over €2bn out of the economy in Budget 2014 would jeopardise Ireland's chances of meeting EU deficit targets and risk a seriously weighty fine from Europe.

The "will we, won't we" uncertainty is damaging to public confidence and should not be allowed to continue, drip feeding public expectations for the coming four months. The Government must now be aware that it is this type of mixed message that led to a serious backlash at the local and European elections. Of course nobody wants another austerity budget. Of course it is important to restore consumer confidence so that people will open the purse strings again. Of course it is vital that the "real economy" gets a boost that will feed into further falls in unemployment and a reduction in the enormous welfare bill for the State. These are all aspirations shared by the hard-pressed coping classes. But real political leadership is needed to convince people that there is a plan, that cutting waste in the public service is a serious government priority, that the various taxes and charges are at an end and that just because the troika has gone the Government won't return to its old profligate ways.

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