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Martin as clueless as Kenny on the essential figures - Doherty

4 February, 2016 - by Pearse Doherty TD


Sinn Féin Finance Spokesperson Pearse Doherty has said Micheal Martin and Fianna Fail have also got their figures wrong in relation to the fiscal space.

Deputy Doherty cited yesterday’s interview on Six One where the Fianna Fáil leader made a major error.  While accepting that fiscal space is €8.6bn he went on to claim that the non indexation of tax bands would add a further €2bn.

In fact, as clearly stated to Sinn Fein by the Chief Economist in the Department of Finance that is not the case.

Pearse Doherty said:

“We now have two men who want to be Taoiseach who clearly haven’t grasped how the fiscal space works. That is simply not good enough.

“The lack of understanding shown by Kenny and Martin raises major questions about whether Fine Gael and Fianna Fáil have any realistic plan based on real figures.

“Michael Martin is as clueless as Enda Kenny on the question of how much is available for spending on our public services yet he is throwing out promises of tax cuts and spending nevertheless. That is not good enough for the Irish people.

“Only Sinn Féin can be trusted with the economy. Only Sinn Féin have a costed plan based on reality, not on guesses.”

Below find correspondence from the Department of Finance’s Chief Economist John McCarthy in which Mr McCarthy confirms Sinn Féin’s analysis that the non-indexation of taxes would not affect the net fiscal space of €8.6bn.

Hi Eolan,

The position you have set out below is correct on both counts. 

 Best,

 John McCarthy| Chief Economist/Assistant Secretary | Department of Finance, Government Buildings, Upper Merrion Street, Dublin 2 DO2 R583 |

Direct:                  (+353) 1 604 5802      

Mobile:                 (+353) 86 026 7938

Website:             www.finance.gov.ie

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From: Eolan de Burca [mailto:[email protected]

Sent: 02 February 2016 09:31
To: John McCarthy (Finance)
Subject: Fwd: Fiscal Space

Hi John 

I would be much obliged if you could confirm that my understanding below is correct:

The potential additional revenue that would be generated from a political decision not to proceed with indexation is approximately €2 billion. This additional revenue from not indexing is included in the net fiscal space figure of €8.6 billion.  Conversely, the net fiscal space of €8.6 billion cannot be increased from non indexation. 

Also, were a government to introduce a new tax raising measure, that the first and full year effects of any such measure would cumulatively increase the fiscal space.

E.G

First year

Full year

Yield

€200 million

€450 million

Increase fiscal space by

€200 million

Further €250 million

Many thanks 

Eolan

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