As Budget Day approaches you will see and hear the intensity of predictions and analysis from the ever growing phalanx of pundits will increase.
As varied and inaccurate as some of these predictions may be, there does appear to be a growing consensus that the budget announcement must contain measures designed to promote growth within the Irish economy and jobs for Irish people made unemployed by this recession.
The opposition parties have taken to using the “stimulus” buzzword to describe their approach. They have spent the past few months calling for stimulus packages, perhaps trying to echo and suggest the “stimulus” packages introduced in the United States.
I will refrain from pointing out that the first broad stroke stimulus package introduced in the USA failed to really work its way into growth and real jobs. In many cases the money ending up back in the banks instead as citizens chose to save rather than spend.
The problem with the opposition approach is that they stop short of defining what they mean by “stimulus”, as if the buzzword was enough in itself. It is not. Just calling for a stimulus package is pointless unless you are able to identify the specifics which that stimulus package must contain.
I suppose you can understand their mutual reluctance to go into specifics, as most of the two parties separate proposals will be contradictory – but there will be time in January and February of next year to explore this point further.
The point I want to get across here today is that I want to see proposals for growth in the budget, but – more specifically – I want to see specifically targeted measures. Ones that are aimed that creating growth here and creating Irish jobs.
The one thing all of us in this country know is that there is a massive shortage of money in circulation, so we cannot afford to waste any of the public’s money on pointless or unfocussed schemes.
By pursuing a broad stimulus approach, the opposition risk driving our substantial positive balance of payments into the red by allowing money to go on imports and thus flow out of Ireland to stimulate economies abroad.
I have spent the past 8 – 9 months using the platform I have in this newspaper to put forward proposals that encourage and support growth and jobs here in Ireland in targeted ways.
One of the most recent was the idea to expand the Government’s existing and successful Home Energy Saving Scheme by reducing VAT to 5% on all home energy upgrades and repairs. It is a very labour intensive area that already employs 5,000 people, and has the scope to employ many more thousands of unemployed building workers.
Another idea I have promoted here is get much needed credit flowing here by allowing Irish business owners borrow a small amount of money from their pension funds for five years without any tax liability. I estimate this measure alone could release €1billion in business credit be if we allowed about 1.5% of the money held in managed pension funds be released in this way.
As far back as July I was looking at how we could use this Budget to attract the video and computer games industry here from the UK by offering them the 20% tax relief here that the UK government have decided to scrap. It is literally a billion pound industry in the UK. It employs about 30,000 people there, mainly graduates. It is a huge exporter and contributes over £400m to HM Treasury in taxes every year.
I am confident the Budget will contain measures aimed at specific indigenous sectors – the reality is that it must. We will not get back to prosperity with austerity measures alone. We need to get people back to work for not just to show we are a recovering economy, but also to show that we are a fair and ambitious society.
This Budget must and can show that Irish people have a right to be ambitious and that we have the skills and means to attain those ambitions here at home.
