Tuesday 12 December 2017

Noonan says austerity ended more than 12 months ago

Michael Noonan: Debt, standing at an estimated 111pc of GDP, is 'sustainable'
Michael Noonan: Debt, standing at an estimated 111pc of GDP, is 'sustainable'
Colm Kelpie

Colm Kelpie

Has austerity had its day in Ireland?

Finance Minister Michael Noonan seems to think so.

The minister told the Dail yesterday that austerity was no longer a featureof life here as the most recent Budget didn't hike taxes or impose spending cuts.

"Austerity ended in Ireland over 12 months ago," Mr Noonan told the Dail, in response to questioning from anti-austerity alliance TD Paul Murphy.

"The most recent Budget imposed no new expenditure cuts and no new taxes.

"A significant amount of tax relief was given in the Budget, both in terms of reductions in Universal Social Charge and Income tax.

"So, you keep singing the same song but it's last year's hit parade, or two years ago."

Budget 2015, once expected to be used to impose another €2bn of austerity policies, instead made way for expansionary measures worth about €1bn.

And there are promises of further income tax concessions if resources allow next year and in the coming years if this current government is re-elected.

But opponents may disagree with the notion that austerity is dead., especially as the first water charge bills come in April.

Almost as soon as the final vote was counted in Greece's national election last month, Ireland's fractured far-left movement was scrambling to claim ownership of the success of anti-austerity party Syriza, with Mr Murphy and Sinn Fein in particular trumpeting the win as a vote against austerity.

Mr Noonan said yesterday that the mild boost to people's wage packets last month following his Budget will be complemented with cuts in energy prices thanks to the dramatic slide in oil prices.

Mr Noonan also said Ireland's debt - at an estimated 111pc of GDP last year - was sustainable.

He pointed to the issue of Ireland's first 30-year bond on Tuesday at record low interest rates. The bond raised €4bn for the State but the NTMA could have sold bonds worth €11bn because interest was so strong.

Mr Noonan added that the Government had restructured €9bn of International Monetary Fund (IMF) debt last year and plans to restructure another €9bn in the first half of 2015 including €3.5bn today

"As a matter of fact we'll be doing €3.5bn of the €9bn [today] because the NTMA has the cash," he said.

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