Sinn Féin - On Your Side

Budget 2009 Opportunity for Economic Recovery

13 October, 2008

Sinn Féin Economic Spokesperson Arthur Morgan TD has today urged the government not to revert to type by falling back on shortsighted cuts in public services that will cause lasting damage on the economy. The Deputy said "Budget 2009 should be seen by the government as an opportunity to take the first steps on the road to economic recovery."

The Louth Deputy said:

"In Sinn Féin's pre budget submission 'Realising Ireland's Potential' we have stated that despite the current difficulties the Irish economy can be turned around. However this can only happen if the government has the savvy to use the next twelve months to tackle the fall-out from the financial crisis and the construction sector collapse.

"Budget 2009 must aim to stabilise and re-invigorate the economy, prioritise job creation, deal with the needs of low to middle income earners facing unprecedented cost-of-living pressures, tackle unemployment and address the massive shortfall in public finances.

"The government's decision to underwrite the banks means there will now be particular focus on any attempts to cut public spending. The Irish people will not accept government claims of an empty purse in the wake of such a momentous guarantee.

"The government's intervention in the financial sector has given the Minister for Finance significant powers over the Irish banks. It is essential that he uses those powers for the benefit of the state and ensures proper payback for the taxpayers who have funded this insurance scheme. The terms and conditions of the guarantee must include a new bank levy to be introduced with immediate effect and a proportion of the money should be diverted to MABS to help homeowners in current difficulty. In addition the government should take a shareholding in the banks as part of the proposed bank guarantee levy. However with a projected tax receipt shortfall of €6.5 billion for 2008 and an exchequer deficit of €15 billion by the end of 2009 the monies appear not to be there for government to consider the recapitalization of Irish banks.

"Within the Sinn Féin pre budget submission we have made a number of public finance proposals. Increasing the PAYE tax credit by 5% would meet the current annual cost of living increase. Revenue acquired through the introduction of a 1% increase in the health levy for those earning in excess of 100,000 euro could be channelled into increasing the income threshold for the medical card.

"The government, through the Commission on Taxation, should undertake a rolling review of taxation, to increase the number of income tax bands in order to assist those on low to medium incomes and ensure those on higher incomes are paying their fair share. We have also called on government to remove the PRSI ceiling.

"Up to one billion euro could be raised by making all discretionary tax relief schemes available only at the standard rate, with exemptions applied only if there is a proven benefit to the Exchequer.

"Tomorrow's Budget must be used by the government as an opportunity to turn around the fortunes of the state whilst in tandem protecting the most vulnerable and a reprioritising of job creation and enterprise to ensure the economy's sustainability into the future." ENDS

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