A think tank is set to warn that pension age should be raised to 70, while also recommending that Budget Day tax cuts are postponed.
In a warning to Finance Minister Paschal Donohoe, the Economic and Social Research Institute (ESRI) will recommend a number of measures to avoid “the same overheating difficulty experienced prior to the 2007/08 financial crash”, the Irish Independent reports.
The body will tell a Dáil committee today that a “neutral budget” is needed to maintain economic progress.
A presentation today will also advise the Government to plan for Brexit's impact, invest in social housing and introduced a vacant site tax.
There is also a firm warning that planning needs to get under way for dealing with an older population.
Among the ways to offset the cost of an aging population is the extension of the pension age to 70, keeping people in work for longer.
The qualifying age is already set to rise to 67 in 2021 and then to 68 in 2028.
The body suggests the Government should at least consider “a mix of increased contributions, delayed payments and extended working lives”.
In relation to the upcoming budget the think tank says: “We believe budgetary policy should be neutral, in that it should not seek to actively stimulate or contract the economy.”
However, Mr Donohoe has indicated he intends to introduce some tax cuts which would be seen as an economic stimulant.
Speaking yesterday he said workers deserved some pay-back after “a period of shock and awe in relation to personal taxation”.
He has committed to bring forward a “broadly balanced budget” which will prioritise the self-employed.
“And in relation to personal taxation I believe the issues relating to the standard rate cut off point and levels of USC for people on low and middle income are areas where we have to make steady progress,” he said.
It's back-to-school time for politicians. The long crazy summer-school season - whereby those who can't function outside the political bubble can stay in it, but in a more 'fun' way, by listening to speeches by off-duty economists about what Willie Clancy would have thought of Brexit, before getting book recommendations from Paschal Donohoe at the bar afterwards - finished up during the week, and will now be replaced by think-ins and away-days in preparation for the real thing.
The Minister for Finance, Paschal Donohoe, last week announced his intention to repay early, and in full, the outstanding programme-related International Monetary Fund debt of around €4.5bn and the bilateral loans from both Sweden and Denmark, amounting in total of €5.5bn. In doing so, he said Ireland greatly appreciated the support and assistance from the IMF and the "European partners", which was provided at a time of great uncertainty for Ireland and which was key to our path to recovery: "Their support, friendship and solidarity will not be forgotten," Mr Donohoe said, in a comment which may ring somewhat hollow with certain citizens. In terms of helping to draw a line under a most ruinous lost decade, however, the announcement last week is to be welcomed. The Finance Minister must now turn his hand to the Budget next month.