Business Irish

Friday 19 April 2019

Failing to balance the budget leaves us less well able to manage in the next downturn - Central Bank Governor

Central Bank Governor Philip Lane. Photo: Stephen Collins/Collins Photos
Central Bank Governor Philip Lane. Photo: Stephen Collins/Collins Photos
Donal O'Donovan

Donal O'Donovan

The Governor of the Central Bank has warned that failing to balance the budget has left us less well able to manage the next downturn.

In a speech that will be seen as a shot across the bows of Paschal Donohoe ahead of Budget 2019, Philip Lane told the Magill Summer School that: “The Government really should be running a surplus at this point.”

He urged the Government to target a bigger budget surplus, including hiking taxes to finance needed public investment.

Volatile corporate tax income, which has been ahead of expectations, should not be used for day-to-day spending, he said.

"In view of the prospect of further economic expansion during 2019-2021, a revision in the budget balance targets for 2019-2021 may be in order if a cyclically appropriate policy stance is to be attained," Philip Lane said.

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