Date Released: 17 June 2014
Labour in Government must insist that there will be no further cuts affecting working families or those who depend on public services in the October budget, SIPTU President Jack O’Connor has said.
He said the plan for a further €2 billion in cuts or new taxes is not justified in the light of recent exchequer returns which are €1.2 billion ahead of target for the first five months of the year.
O’Connor said that the new leader of the Labour Party must resist the call for the €2 billion adjustment in any talks with Fine Gael over Budget 2015 and to leave the Government over the issue, if necessary.
“If the public finances remain as good as this for the remainder of the year there will be absolutely no justification for a budget of anything remotely approaching €2bn. Therefore, it is perfectly feasible to insist that there must be no further cuts affecting working families or the people who depend on public services,” Jack O’Connor said.
“We have already come out publicly calling on the incoming leadership of the Labour Party to insist on this as a red line issue in any talks with the Fine Gael Party and we have also called on them to make it clear that they will leave Government on this issue if necessary.”
He said that it was possible to achieve the deficit target of less than 3% of GDP without anything remotely like a €2 billion correction given the growth in tax revenues which are largely the result of growing employment in the economy.
“Of course, the levels of growth must be maintained in order to ensure that the gap between tax revenue and spending does not expand beyond 3% of GDP by the end of 2015. This is why we are urging the Labour Party within the Government to ramp up its emphasis on measures to stimulate the growth of domestic demand. This accounts for three quarters of GDP and two thirds of it is comprised of consumer spending,” he argued.He said the Government must press ahead quickly with the establishment of the new Strategic Investment Bank.
“If it could be established in time for September it could compete at auctions for the €400bn in low interest loans for the SME Sector which has just been announced by the European Central Bank. Generating jobs is the key to recovery and gradually improving living standards once again. After that, the next most important element is increasing wages which also increases employment because it improves spending power within the economy. We have to use every opportunity to press the case,” Jack O’Connor said.