‘No consultation’ on policy statement

The Government has been accused of ignoring “new politics” by publishing the summer economic statement without consulting with other parties.

Speaking in the Dáil, Labour leader Brendan Howlin said he had read details of the statement in the media, and criticised the Government for setting up a rainy-day fund when major investment is needed in broadband, schools and other essential infrastructure.

“Over six weeks ago, this Government came to office amid a flurry of talk and promises of new politics. Today, we have seen the publication of the summer economic statement. It has been published without any consultation with the members of this House,” he said.

Mr Howlin said TDs read of details of the statement in newspaper reports yesterday, including information on a new “rainy day fund”.

“When we have an urgent need for investment in infrastructure, whether it’s broadband, or schools or health services or roads, apparently the Government is going to put it [money] on deposit — even if it was used to pay down debt, it would be more reasonable than simply leaving money on deposit.

“Investment in urgently-needed infrastructure makes much more sense than simply creating this so-called rainy day fund, which in effect is leaving money unused on deposit in the central bank.”

However, Mr Kenny told the Dáil that a rainy-day fund is among “five specific commitments in the Programme for Government in respect of the economic opportunity that lies ahead.”

Mr Howlin added that a ratio of at least 2:1 should be allocated in investment and tax reductions. He was speaking as ministers Michael Noonan and Paschal Donohoe published the summer economic statement, which says the Government has €1bn available to use on expenditure or tax cuts in October’s budget .

“There is a train of thought among economists these days that we should be very risk adverse and that amounts apparently to prudence. An aversion to risk must not risk the very factors that we need to invest in our economy if we are going to continue to grow and provide jobs to people. That approach disregards the legitimate demands of the public,” said Mr Howlin.

But Mr Kenny told the Dáil the Government would now have more money to spend than expected: “The total amount available to the Government over the five years is estimated to be a cumulative €11.3bn. Critically, the space for 2017 has increased to €1bn, with €1.2bn available in 2018.

“It means the Government can bring forward some spending for 2017 for the kind of issues mentioned by the deputy, including infrastructure and social issues, that was not available even three months ago.”