Government should plan neutral budget

By Maurice Garvey 

THE Government should plan for a neutral Budget this autumn to mitigate against potential economic shocks, according to MEP Brian Hayes.

The former South West Dublin TD cited several threats on the horizon, including Brexit, political instability in Italy and rising energy prices, as a viable reason for the State to put aside a rainy day fund.

Brian Hayes 1

Dublin MEP Brian Hayes 

 “It is time in Ireland to apply the precautionary principle and to explain to the public that after every period of growth comes a period of downturn,” said Hayes.

“It is how we prepare for that downturn now that dictates our economic performance into the future.”

 Hayes feels Seamus Coffey, Chair of the Irish Fiscal Advisory Council, was “right to point out that Irish corporation tax has a narrow base with only 40 per cent of the tax being paid by just ten companies”.

 “During this period of buoyant revenues, we should aim to run a budget surplus and put significant resources into a rainy day fund as a shock absorber for any downturn.”

 Hayes also believes in widening the tax base, in particular, the threshold for the higher rate of income tax “needs to be raised above the average wage which now stands at just over €38,000”.

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