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THE SUMMER ECONOMIC STATEMENT setting out what we are likely to see for next year’s Budget has been published.
Unlike other years, Finance and Public Expenditure Minister Paschal Donohoe had to consider two scenarios when drafting today’s statement: One, in which there is a real possibility of a no-deal Brexit, and the other, in which it is all relative smooth sailing after the Brexit deadline of 31 October.
Speaking to reporters this afternoon, he said the “external environment” is becoming “increasingly challenging”.
Donohoe added that the “disorderly Brexit” in now a “real possibility”, which is why the Irish government needs to plan for such an event.
So, what is the Summer Economic Statement?
What is actually being talked about is how much money the government has to spend in the next Budget – on the likes of tax cuts, new transport systems, better roads, and improved health services.
How much extra money do we have to spend?
Donohoe said the budgetary package for Budget 2020 is €2.8 billion, with €700 million in fiscal space (the amount of money there for tax cuts or new spending measures).
Of the €2.8bn, about €1.9bn has already been allocated to fund capital projects and public pay. It should be noted, this is the case if there is an orderly Brexit.
Today’s statement predicts a surplus in GDP in an orderly Brexit of 0.4%.
What about Brexit? Will that change this year’s Budget?
The statement sets out an “orderly Brexit” would see small surplus next year, with a €300 million increase in public spending and €600 million in new taxation measures.
A “disorderly Brexit” would necessitate essentially the same budget but there would be “temporary, targeted funding” for sectors that are most affected by Brexit.
The surplus mentioned above would also turn into a deficit “in the region of -0.5% to -1.5%” in GDP next year.
When will the minister decide what option to go with?
Speaking to reporters last week, Donohoe said he will have to make an “informed judgement” or guess as to whether there will be an orderly or crash-out Brexit in September, ahead of Budget day on 8 October.
The minister also reiterated what he said last week – that there are no plans to bring out another budget, post-Brexit.
Fianna Fáil’s Michael McGrath TD and Labour leader Brendan Howlin TD are among those who have said in the past few days that the government should not rule out an emergency budget.
“It is very important that Ireland sends out a signal that we will deliver and we are able to make our own decisions and project the right kind of tone about how we set our economic policy,” Donohoe said
I am absolutely certain that the right course of action for our country this year is for a single budget based on the parameters I have outlined.
Are we spending any of the cash on BIG projects announced?
The National Broadband Plan and the National Children’s Hospital are the two big projects mentioned in the statement today, with €200 million set aside for these two plans.
“Since the UK referendum result in 2016, a number of steps have been taken to build up the resilience of the economy so that we have the capacity to deal with adverse economic shocks. This includes building up our fiscal resources by balancing our books last year for the first time in ad decade, reducing our debt burden and establishing the Rainy Day Fund. The steady increases in public spending implemented in recent years, with a particular focus on public capital investment, play an important role in supporting resilience in the face of Brexit,” said Donohoe.
He added:
While the sensible economic and fiscal policies implemented over recent years have placed Ireland in a stronger position to deal with challenges, including Brexit, continued careful management of the economy and of the public finances is needed now more than ever in order to chart our way forward through the uncertain times ahead.
By approaching the Summer Economic Statement in this way, we will ensure that we are prepared for all eventualities so that the public finances and our people are protected in the years to come.
But it is not just Brexit the government has to worry about.
Today, economic experts warned that Ireland runs the risk of recessionary spending cuts if it continues down the path of spending.
Stephen Kinsella, Associate Professor of Economics at University of Limerick, told the Budget Oversight Committee:
“Ireland risks replaying the 2007-9 period of dramatic cuts to public expenditure on its current forecasted path of spending increases.”
With the finance minister holding the nickname of ‘Prudent Paschal’, he runs the risk of damaging Fine Gael’s perceived reputation of looking after the purse strings if his predictions of Brexit dramatically go off course.
- With reporting by Rónán Duffy
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Philippines will sort them out in no time
How can other religions move to countries and not cause havoc and mayhem? Can you imagine scientologists blowing up and shooting innocent people? They’d be shut down in a heartbeat so why is the religion of peace tolerated? I’ll tell you why. You’d get labeled a racist by people who hate labels. Can you imagine Jews fighting for Nazi rights just as liberals fight for Islam. This is what happens when you get brainwashed people who swallow mainstream media with an agenda. Wonder why there are no bombings in places like Japan? A tiny Muslim population that’s why. World leaders in common sense and the blindingly obvious.
@SteveW: perhaps tolerated because it is not responsible, it is the social outcast(s) who islamized their radical view, Japan is not immune but western media coverage is more intense here and gives account in English language, you won’t see CNN Japan being tuned into when something happens in Tokyo or anywhere else for that matter
Red not being funny here but what on earth has media coverage or speaking English got to do with anything? What about other countries that have to put up with these large minority”outcasts” you’re defending? Burma, Kashmir, China, Thailand, Kenya, Ceychnya, Phillipines to name a few. And that’s not including Europe and US.
@Red Marauder: it seems like every country islam has settled in there is serious terrorism problem now south Philippines is exploding now into serious violence. south sudan south Thailand nearly all of Africa all across middle east there is major wars going … after watching primtime on RTE tonight on Islamic extremists i am becoming very fearful for my family future and myself and like all other irish people throughout the island of Ireland…..
@Bobby wilson: And that was on RTE , who had an article about everyones favorite troll Katie Hopkins being sacked for saying there is a problem with islam . https://www.rte.ie/entertainment/2017/0526/878159-katie-hopkins/
@SteveW: it is simple to install fear you need widespread coverage, so they choose targets which will be in the news, it is repeated everytime, a mall, a concert, twin towers etc, the density of media coverage is highest in Western countries where English is universal
@Remy: everyone can quote the Koran, there is no central regulation, you not need to be a scholar for that, now how you sell it or interpret it is different, there are far more peaceful Muslims than what you hear about in the news
@Red Marauder: ”there are far more peaceful Muslims than what you hear about in the news” . Phew ! Thank god you said that , I was thinking it was the 75% were radical , Thank heavens it’s only the other 25% .
doing some basic math, we get that about 006625% not even close to your estimates
@SteveW: 110%
@Remy: people like you and your ilk are just part of the problem
”Tis gonna be a red Ramadan
This atrocity and outrage will be handled in the Phillipines but it will scare the wits out of us Irish and get us highly exercised.
Many Irish live in fear and terror although we are far from a prime target.
@Tony Daly: I actually can’t think of anyone I know who lives in fear of an ISIS attack. I do know plenty who agree we should do our bit to help those trying to escape the terror of these animals while also protecting ourselves by having proper checks on those entering our country.
@Tony Daly: As far I’m aware no one lives in fear of isis in Ireland , but it’s only right that we examine it’s core ideology . Prime time has a segment on isis in Ireland , which obviously doesn’t exist . Whaaaatt !
@Jane: I am taking lots of the alarmist comments at face value. It could be just posturing of course but after each atrocity the alarmism expressed is voluble and even hysterical.
@Ken Hayden: of course it may just be intentional alarmism and deliberate exaggeration of threat on the part of those who comment on Ireland as a target of ISIS.
I rember the hysterical and emotive comments after previous outrages in Europe predicting Ireland as the next target.
It may just be playing up by those who wish to stir up fear and hate or else the Irish are an especially timid nation.
@Tony Daly: And of course , it just might not be deliberate exaggeration .
It cannot be said enough , not all muslims are terrorists , but in among them , there are people who can be , and are radicalized . Denying there is no threat is not a solution .
@Tony Daly: it’s not fear. Tony or alarmist comments. It’s frustration that the empty vessels that make the most noise ie a small minority of do Gooders that get listened to because they shout racist and the pure frustration at the apologists that are so mind numbingly stupid that they get listened to by policy makers
@Tony Daly: why is their a constant down playing on all this Islamic terrorism across the globe by far left supporters by making out its western countries fault for making Islamic people angry.. Their is attacks on churches in Egypt /Nigeria /Pakistan /Iraq /Syria and many many more soon their will be no more Christians in the middle east except Israel…..
@Bobby wilson: 6 Things that cause islamic terrorism .
Intolerance .
Unemployment .
Poor quality council housing .
Not enough diversity on the BBC .
Islamophobic tweets .
Katie Hopkins .
Things that don’t cause islamic terrorism .
The ancient holy book which promises a blissful eternity in the afterlife for anyone who wages deadly jihad against the infidel .
I’m here in Manila. The chief of cops is on tv saying it was some lad trying to rob chips from the casino. Very much doubt it was ISIS related.
@Richie Kennedy: isis claimed responsibility?
@Jackson Bollovks: When the chips are down .
@Richie Kennedy: any more info Richie? My mum is on Negros at the moment but flying to Manila on Saturday to head home Sunday. Slightly concerned
@Maria ✏️: I’m living in Makati Maria, a city in Metro Manila. No updates but nothing to be concerned about. Might be some heightened security at the airport which is a good thing.
@Maria ✏️: Flights are delayed alright so she could miss a connection. The security in the airport is always tight so I wouldn’t worry too much. It seems to have been a lone gunman trying to steal gambling chips.
@Jackson Bollovks: I’d say they would claim responsibility for anything to sow fear. Doesn’t appear to be a terrorism incident based on the information available.
Casino Royal-Q’aeda
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