Summer Economic Statement Devoid of Detail on Disorderly Brexit Budget Plan

Labour Finance spokesperson Joan Burton has criticised the Summer Economic Statement for being devoid of detail on what approach the Government will take in the event of a no deal Brexit on 31st October as it doesn’t include any detail of what additional spending may be required, or what EU funding has been secured to cushion the impact on Ireland. She further added that there was no scope for income tax cuts and available fiscal space should be committed to improving public services.

Deputy Burton said:

Fine Gael having been working overtime to rebuild their fiscal prudence and economic competence but unfortunately the Summer Economic Statement is surprisingly light on detail as to what approach the Government will take in a disorderly Brexit scenario. They won’t share that information with us until September if not later. Once again, the Budget scenario in October is likely to be substantially different from what they are telling us now.

“The SES does not outline what will be spent in the event of a no deal Brexit nor does it outline what funding, if any will be available from the EU to support Ireland in a disorderly Brexit.

“Instead the Government have set out what they intend to do anyway, but then don’t give us any extra information on what will happen in a worst-case scenario. This will do little to build confidence for those that will be most impacted.

“If the UK crashes out we don’t know if there will be a set of Departmental supplementary estimates for the sectors that will need it, or a special Brexit budget for exceptional measures. We are told they will run a deficit and borrow if needed, but this is no way to plan.

“We do know that €500m was allocated to the Rainy Day Fund in 2019, and a further €500m will be put in again in 2020. The SES does not tell us if they will use that in a hard Brexit scenario – which would obviously be a ‘Rainy Day’

“In an effort at prudence they have cooked the books in advance by allocating a so called €200m ‘expenditure reserve’ to cover their cost overruns in the Children’s Hospital and National Broadband Plan. That is €200m they’ll have each year going forward for cleaning up their spending messes.

“Meanwhile no provision has been made in the SES for the Christmas Bonus for social welfare recipients that will cost in the region of €300m. The Fiscal Council has specifically criticised the government for failing to provide for this on an annual basis. “With €700 million available for new measures, the Labour Party is of the view that there is no scope for income tax cuts but that additional resources should be committed to improving public services. The SES was also silent on what carbon tax increases are planned, and what impact the digitial services taxes being intorduced in many EU countries will have on Ireland’s corporation tax revenues.”