SAVINGS FROM THE promissory note deal should be used to reduce the fiscal consolidation from €1 billion in 2014 and again in 2015, according to The Nevin Economic Research Institute (NERI).

Giving its “alternative approach” to Ireland’s budgetary policy over the next two years, the institute states that the promissory note savings should be utilised for budget 2014, and for the year after.

Investment stimulus

The institute also recommends that an investment stimulus of €1.5 billion should be made in 2014, with a further €3 billion stimulus in 2015. The institute, which is supported by a number of trade unions, said that the next budget should focus on targeting households in the top 10 per cent income bracket, as well as capital assets of those who can afford to pay more than they are doing now.

They state that this would amount to €1.65 billion and €700 million, respectively, in 2014 and 2015.

The report states:

Ireland cannot continue to provide adequate public services and income support without addressing the level, composition and incidence of taxation. Reform and widening of the tax base is a crucial part of a medium-term fiscal strategy which needs to commence now. Some reforms and progress have taken place in recent years but there is still some distance to go.

If these recommendations are adopted by government, NERI argue it could reduce the government deficit to 3 per cent in 2015.

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