S&P: Election may spur more spending on 'floundering' health service

S&P: Election may spur more spending on 'floundering' health service

The election could lead to more spending on the "floundering" health service but will have no immediate effect on the country's credit rating, S&P Global Ratings has said.  

But S&P expects no sharp change in policies when a new government is formed following the February 8 election, although "pressure could increase over the medium term with respect to, for example, the floundering health care system, house price inflation or rising budgetary reliance upon historically high corporate tax receipts".

The Irish Fiscal Advisory Council and other economists have in the past repeatedly warned about the huge overruns in health spending in recent years.

In its bulletin, called "Ireland snap election is unlikely to sway economic policy", S&P said "vigorous" economic growth and robust employment has helped reduce Government debt levels. It also identified risks facing the current buoyant corporate tax revenues from global tax reforms.

But the ratings firm believes a range of policies will change little under the next government. 

"Our base-case assumption is that, regardless of the election outcome, the Irish economic model--combining low tax pressure, openness to immigration and trade, flexible labour and product markets, and a commitment to put Ireland's elevated debt on a downward trajectory--will remain intact," S&P said. 

It comes as business groups unveiled their election wish lists or business manifestos to influence politicians in the election campaign 

Ibec said that for the first time the group's business manifesto is led by issues around quality of life, such as housing, infrastructure and, transport, as employers fight to hire skilled workers.

Responding to global tax reforms threatening the Government's corporate tax receipts and fashioning a policy for the indigenous companies were among the top priorities, Ibec's director of policy and public affairs, Fergal O'Brien said. 

Legislation, including changes to labour contracts and the Government's ban on oil drilling, were not "properly assessed", he said.    

Conor Healy, chief executive at Cork Chamber of Commerce, said opening an office of the National Transport Authority in Cork would help the next government implement investment plans in "sustainable housing, transport, and energy". 

The Small Firms Association said it wants the next government to focus on promoting businesses by helping cut insurance and commercial rates costs, and to help firms access cheaper credit by lowering the elevated level of interest rates Irish banks charge small firms. It also wants better childcare, housing, transport, and broadband, and for clear guidance from government to help firms adapt to a low carbon economy.

Isme said its election shopping list includes ways to lower costs for citizens and businesses and for ways to implement recommendations made by the OECD last year for Irish SMEs. 

Its chief executive Neil McDonnell said "unrealistic expectations" from public-sector unions were hampering investment.

On carbon-cutting plans, Aidan Flynn, general manager at the Freight Transport Association Ireland, said it wants a "detailed focus" for ways 300,000 commercial vehicles, including 80,000 HGVs, can use new  fuels.

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