Tuesday 22 October 2019

IMF criticises Michael Noonan’s Budget for targeting the poor

Thomas Molloy

The IMF is unhappy with Finance Minister Michael Noonan’s failure to protect the poor from some cuts in this month’s Budget, the Washington-based organisation said today.

While welcoming means testing for medical cards and student grants, the International Monetary Fund said there should have been measures to protect low income groups.

The Government will have to monitor health spending carefully because it is still far from clear that Budget measures such as charging private patients for using beds in State hospitals will work, the IMF added.

It also urged “careful preparation” to ensure people here pay the property tax and warns that the Government has not yet finalised plans to shave €400m off the public sector pay bill this year and €1bn next year.

The IMF’s lengthy report also highlights that Irish public sector workers are paid much more than private sector counterparts or civil servants in other countries. Low skilled public sector workers, teachers and medicinal staff are particularly well paid, the report adds.

The IMF’smission chief to Ireland said an accord to restructure so-called promissory notes used to rescue former Anglo Irish Bank would be an “essential part” of a package needed for the nation’s “smooth exit” from its bailout program.

“We would certainly hope and encourage a promissory note deal before March,” said Craig Beaumont, the IMF official, said on a conference call with reporters today.

Beaumont said that the European Stability Mechanism taking stakes in Irish banks could play a “valuable role” in reducing the nation’s debt burden.

The Fund also repeated the country’s access to bond markets remains “fragile”. It added that Irish banks may need more job cuts than 20pc planned by the country’s main lenders.

Also in Business