Caretaker Finance Minister should publish revised deficit projections
22 May 2020
Spokesperson on Finance, Public Expenditure and Reform
With the caretaker Fine Gael government now indicating there will be a €30 billion deficit and looking at ways to cut social welfare spending, Labour TD Ged Nash has called on the acting Minister for Finance to now publish revised deficit and budget figures for the year.
Deputy Nash said:
"The Stability Programme Update was only published four weeks ago, however remarks from the acting Minister for Finance in recent days indicate that the size of the projected deficit has grown by nearly a third, from a likely €23bn to €30 billion. If that is the case, then the Government should provide the background data to back up the new figure. The Minister told the IIEA there wouldn't be an update until October. That isn't good enough.
"Considering the country has barely reopened, and that labour- and capital-intensive sectors like construction have only returned this week it is not clear what the basis for the dire warning is? We won't have real data on how the deficit may grow or shrink until we get more people back to work, and more businesses reopened.
"The Taoiseach has also, wrongly in our view, speculated about how the Covid-19 pandemic unemployment payment, that he introduced just a few weeks ago is unfair and not sustainable. What the €350 a week payment has shown is the shocking levels of low pay and insecure work in our economy that the Labour Party wants to see resolved with a living wage and better rights for workers.
"If the acting Taoiseach and the Minister for Finance insist on putting speculative new deficit figures into the public domain and thinking out loud about how to cut the Covid-19 pandemic unemployment then they should back it up with some real figures.
"What the Minister for Finance should be doing at such a critical period is reassuring the public that the State is prepared to spend and invest what it takes to protect our people, and restart our economy.
"The fearmongering today about future interest rates is the latest installment in the Fine Gael effort to pursue more conservative economic policies. It flies in the face of the move by the ECB to commit €750 billion in pandemic lending, and the fact that investors are now paying Ireland to borrow money. Much of the deficit this year is once off, and also relates to the refinancing of long term debt on which we will make a significant interest saving. Many workers will also get back to work at the Covid-19 restrictions are lifted.
"If the financial figures have radically changed, then the Government should provide us with an update."