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Government's first budget leads to shrinking economy – Doherty

11 July, 2012 - by Pearse Doherty TD

Sinn Féin finance spokesperson Pearse Doherty, responding to the leaked CSO report today which shows that the economy shrank in the first quarter of 2012 said that the figures are proof that the Government's approach to the economic crisis is causing plenty of pain, but not economic recovery. Doherty said the Government's first budget had led to economic contraction because it had pursued the austerity policies of its Fianna Fáil predecessors.

Doherty said:

“Sinn Féin has argued that the austerity approach of this and the last Government to the economic crisis has served to dampen disposable income and consumer sentiment and that, combined with the lack of real effort to stimulate job creation, this is a recipe for economic contraction.

“The Government had an opportunity in the last budget to reverse the focus of the last Government and concentrate on job creation and growth friendly fiscal consolidation. This should have been done through taxing high earners, protecting low earners, and maintaining public spending in vital public services. Despite election promises, the Government took the opposite route and is intent on pursuing the same austerity, deflationary policies for the foreseeable future.

“Today's CSO results are proof that this approach is inflicting plenty of pain, but very little in terms of economic recovery. The Government's budgetary figures are based on a set of growth assumptions. If the trend we see today is to continue we risk facing into larger deficit adjustments in our annual budgets. The Government has to draw a line under this failing policy.”

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