IBEC calls for €0.5bn less Budget pain to spur consumer spending
THOUGH austerity has worked, the Government now needs to shave half-a-billion euro off this year's Budget adjustment to encourage consumers to spend, according to IBEC.
Discussing its pre-budget submission, the business body argued that Finance Minister Michael Noonan has more choices this year because austerity has worked up until now.
"After half-a-decade of huge crisis, we're back in a much more normal space," said chief executive Danny McCoy.
"While we can be accused of saying that IBEC says no more austerity, the argument is we wouldn't have had a choice at this stage if we hadn't made these choices."
The organisation said the focus should be placed on ways to reduce the tax burden. The adjustment should be reduced from €3.1bn to €2.6bn with no new taxes introduced.
It reiterated its argument that there should be no new tax increases in October's Budget – but it believes public spending should continue to be cut.
Mr McCoy said households needed to know that an end to austerity was in sight.
"We think the austerity phase is over. This Budget has to complete our international commitments but it also has to speak to the Irish public to say that the last few years has actually been for something," he said.
Other key conclusions from the submission include:
Maintain the reduced 9pc VAT rate for the hospitality and tourism sectors and the lower employer PRSI rate for low-wage workers.
No new measures that would increase labour costs.
Improve the R&D tax credit scheme.
Change the capital gains tax regime with a preferential entrepreneur regime.
IBEC claimed that despite the economic figures released last month that showed the country had slipped back into recession, the Government could still meet its budget deficit targets.