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Dublin: 11 °C Saturday 29 November, 2014

The next Government will have to hike water charges – ESRI

The light at the end of the tunnel is still “some way off”, Professor John Fitzgerald said this morning.

Image: Sam Boal/Photocall Ireland

A €150 MILLION shortfall in the cash raised from water charges means that the next Government is likely to hike prices again, according to ESRI researcher Professor John Fitzgerald.

Speaking on RTE’s Morning Ireland programme, Fitzgerald said that the Government’s target of €500 million in revenue from water charges is likely to be missed, with €150 million a more realistic figure.

“That leaves a problem for the next Government, they will have to raise water charges further.”

He said that on-target revenue from water charges could have given the Government “a bit more room for manoeuvre” in the budget for next year.

€2 billion call

Fitzgerald said that at the moment, the Government should be planning to implement the full €2 billion adjustment package in the October budget, contrary to calls to reduce the austerity package to around €1 billion.

He said: “It’s too early to talk about an end to cuts.”

Fitzgerald argued that if the economy continues its current upward trajectory, the Government may be able to face Budget 2016 without the prospect of further cuts or tax increases.

Read: €2 billion budget cuts can be avoided* says ESRI

Fitzgerald’s comments mark a downturn in optimism from the think-tank, which said in April that the country could avoid €2 billion in cuts this year if the economy continues to grow.

He didn’t rule out a gentler budget than in previous years, but said that at the moment the Government should not plan for anything less than the €2 billion.

He said that the Government’s policies had been designed to reverse the dramatic rise in unemployment figures, creating over 100,000 jobs and improving the economic situation of the unemployed.

“But, for the rest of us, we’re paying water charges, we’re paying property tax, and really it’s going to be 2016 before the bulk of the population will feel better off.”

It’s a year too early. We knew we had a long hard road to travel, we’re almost there. People talk about light at the end of the tunnel, well the light is still some distance away.

Read: Economy set to grow 3.3% this year (and we won’t be getting that harsh budget after all)>

Read: Michael Noonan says that Ibec’s budget sums “are at best a guesstimate”>

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