Rainy Day Fund Should Be Deployed In A No Deal Brexit

With the Budget due to be delivered on the basis of a No Deal Brexit, Labour Finance spokesperson Joan Burton TD has said there should be a commitment to using the money available in the Rainy Day Fund to support industries and jobs impacted by a crash out exit by the UK.

Deputy Burton said:

“The Minister for Finance has now confirmed that he will present the Budget in October on the basis of a no-Deal Brexit, and in such a scenario the Irish Fiscal Advisory Council has also said there is a likelihood of a large deficit emerging.

“The Minister has adopted a conservative strategy in an effort to rebuild the fiscal and budgetary reputation of Fine Gael.

“Meanwhile, the Government will send a further €500m to the Rainy Day Fund in 2020, bringing the total available funds there to €2 billion.

“The Labour Party view is that available fiscal space for 2020 should be committed to improvements in public services, and that there is not scope for further income tax cuts with homeless and hospital waiting lists at record levels. We are glad that the Minister and Fianna Fáil have agreed with that approach.

“However, the costs of a crash out Brexit will fall on specific sectors, and will likely require short and medium term fiscal supports.

“The question must be asked, what is the point of a Rainy Day Fund if it is not committed to supporting the economy when such a shock event occurs?

“The Minister for Finance must clarify whether he will use the Rainy Day Fund, and if not, why not?

“The planning for no deal Brexit contingencies and how to allocate such funds will involve difficult choices, but the Minister can re-assure workers and businesses now, by committing to making available the necessary resources.

“It would be bizarre for the Minister to salt away a further €500m in 2020 when the Brexit storm is about to hit, while also committing to borrowing any additional needed revenue to maintain current and capital spending next year.”