Dearey warns on ‘false promise’ of tax cuts and spending increases

Voters have a choice between auction politics or investment in public services

8th January 2016

Politicians can’t have it every way when it comes to managing the public finances, warned Green Party Spokesperson for Finance, Cllr. Mark Dearey, responding to a week of election promises on tax cuts.

Speaking today, he said “Parties promising low tax, high spend have not learned from the mistakes of the past. There are only two choices: we can maintain taxes to fund vital public services or we can shrink the tax base and let already strained services deteriorate further. Committing to tax cuts and better services is a false promise, a promise which one would hope had lost some of its attraction.

“Unfortunately, auction politics is in full swing. It was started by the Government in November with an unexpected supplementary spending increase of €1.5 billion, funded by a last minute increase in corporate tax receipts. Fine Gael and Labour have learnt from the Fianna Fail play book and are starting a bidding war as to who can offer the most tax breaks and spending increases. Renua are trying to outflank everyone by promising a flat rate tax which would favour the better off, while the Social Democrats propose a Nordic model of social spending, while their leaders proclaim that they won’t pay their water charges. Sinn Fein are similarly promising the sun moon and stars while wanting to abolish the one real wealth tax we have, which is the tax on property. Do they all take us for fools?

“There are two fundamental problems with this election giveaway. Firstly, a brief glance around the world should tell anyone that the current benign economic conditions are by no means secure. All it takes is the Chinese stock market to keep falling or someone in Saudi Arabia to pull the wrong trigger and we could just as easily be back in uncertain times. The Fiscal Advisory Council has made it clear that the challenge for the next Government is to develop sustainable and equitable taxation measures for the longer term. Ignoring their advice and resorting to give away budgets will only undermine our long term security.

“Secondly, it is clear that there is an underlying need for investment by the state. The biggest internal threat to our recovery is the lack of housing, transport and other infrastructure. We also have a choice whether we want to accept patients on trolleys and higher third level fees or whether we want to pay for those services in a fair way, which works for everyone. We believe that there is a role for the state in making these sorts of long term investments and that there has to be a sustainable and equitable means of paying for it all.

“The electorate has a choice, they can vote for the illusion of lower taxes and better services, being promised by all the main parties, or the can vote Green to ensure that our taxes are directed at the acute shortages in health, education and housing, transport, energy and broadband infrastructure .”

Posted in Finance Policy.