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Government must outline economic strategy – Morgan

2 July, 2008

Speaking following the publication of the exchequer returns for the first six months of 2008 Sinn Fein's Economic Affairs spokesperson Arthur Morgan TD said the failure of the Government to outline its economic strategy to deal with the current situation was farcical. He demanded assurances from Government that there would be not cuts in public services or social protections.

Morgan said:

"The fact that the Exchequer returns for the first six months of the year published today show a shortfall in public finances of €1.45 billion is a cause of major concern. While we were expecting tax receipts to be down the fact that this shortfall is expected to reach €3billion by the end of the year is alarming. There needs to be a clear focus on protecting public services. There must be no increase in stealth taxes which would hit those on lower incomes (already bearing the brunt of the rising cost of living) hardest.

"The Government bears considerable responsibility for the situation we now find ourselves in.

"For short term electoral reason the Fianna Fáil led government cut income and other taxes to levels which are not sustainable allowing the Exchequer to become precariously over dependent on revenue related to construction and consumption. This is the reason that this state has seen a collapse in public finances to an extent not seen in any other European states open to the same international economic circumstances.

"The Government ignored warnings from Sinn Féin and others that revenue from construction and consumption was wide open to fluctuation. It ignored the fact that with an over-inflated property sector the amount of revenue coming in from this sector was unsustainable. Unfortunately there is also every reason to assume that the revenue from consumption taxes will continue contract in the months ahead.

"The answer to this situation is not cutbacks nor increasing stealth taxes and charges. If the state requires extra revenue to fund essential public services then that revenue must be raised in a fair, transparent and accountable manner with the burden falling on those who can afford to pay. This is what the Government must do. It must also ensure that value for money is achieved in all Government spending - a fact that has not been the case to date. Its needs to rebuild public confidence in its ability to mange the public finances.

"The Government's key priorities at this time must be to:

- Protect the incomes of those on low and middle incomes

- Ensure no cuts to key public services

- Ensuring value for money is achieved in all public spending

- Ensure job losses are stemmed and new jobs are created

- Ensures the delivery of public infrastructure projects by funding these through borrowing.

"What we now need is for the Government to restore public confidence by outlining its economic strategy to bring us out of the current economic and fiscal difficulties." ENDS

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