Update: The General Secretary of the Irish Congress of Trade Unions, Patricia King, has said that Budget 2018 should be an opportunity to shift the direction of fiscal policy towards building a fairer society, prioritising higher living standards and quality of life.
Responding to the Summer Economic Statement announced today she said that a shared concern of most people is the serious under-investment in key economic and social infrastructure which needs to be rectified in the coming years.
“From the information in the Statement, Congress would question the scale of ambition it reflects. A commitment to spending more must be seen against the context of an exceptionally low level of public capital spending by European and international standards as well as a backlog of infrastructural problems and bottlenecks not least in the areas of social housing, public transport, early childhood care and primary health care.
“Congress believes that public spending, particularly in infrastructure, should take precedence over tax cuts. We also contend that the time is right for the Government to use the proceeds of the sale of AIB shares to invest in infrastructure with long-term economic and social benefit.
“Against a background of exceptionally low interest rates on long-term loans as well as a need to fireproof Ireland against the economic damage likely to result from Brexit, we strongly urge Government to commit to public capital spending in the region of 4% of national output instead of 2.5% by 2021 as indicated in the Statement.
“The cumulative shortfall over a five-year period in public capital spending as a result of not reaching 4% by 2021 is estimated to be in the region of €15 billion. This sum of money could have been, and still should be, spent on upgrading our economic and social infrastructure.
“For those without homes the rainy day is here, and all available money should be spent to address this emergency which is due entirely to a catastrophic policy failure,” Patricia King said.
Earlier: Opposition politicians have warned that the Government will have to bin any potential tax cuts.
As Paschal Donohoe, minister for finance and public expenditure and reform, outlined targets for spending and rainy day savings over the next four years both Sinn Fein and Labour rounded on him.
The minister’s Summer Economic Statement set out ambitions for the Government to fund about 500 million euro of projects next year but it did not go into specifics.
It also earmarked an additional spending package of 1.5 billion euro in 2019, 2020 and 2021 and the setting up of a rainy day fund in 2019 which will take in 500 million euro a year to cover a future economic crisis.
But Sinn Fein’s finance spokesman Pearse Doherty claimed the long-term budget plans showed no scope for tax cuts.
"If you are raising your family in a hotel, it is raining today. If you or a loved one are waiting in pain for a medical procedure, it is raining today," he said.
"It is beyond belief that the Government would put this kind of money aside when we have such serious crises in our public services.
"And it shows that this government, nor one led by Fianna Fail, who have suggested that one billion euro should be put aside per year in this fund, can be trusted to fix these crises and deliver quality public services for all our people."
Labour leader Brendan Howlin said the economic statement promised little and would deliver even less.
And he predicted that the Government would shelve plans for tax cuts as it found money to meet the cost of the new public sector pay deal under the Lansdowne Road Agreement and pay for investment in education and health.
"It remains to be seen whether the figures published today will bear any resemblance to reality on budget day, but for now, the odds of this Government passing a budget at all seem slim," he said.
"Minister Donohoe is of course right to talk about the size of the overall budget. But in truth, unless he is willing to axe entire spending programmes, he won’t find much in the way of savings in a system that has been stretched to breaking point over recent years."
Labour’s finance spokeswoman and former tanaiste Joan Burton said: "The Summer Economic Statement had nothing to say on tax justice, nor does it go far enough on increasing capital expenditure.
"We can’t take our recovery for granted and the only way we can ensure continued prosperity is investing in people, in services and in infrastructure."
Mr Donohoe declined to discuss any prospective infrastructure projects like Metro North or the M20 Cork to Limerick motorway.
As part of his statement, he said the Excehequer books would be balanced next year and that 55,000 jobs would be created next year.
Economic growth is being forecast at 3.7% next year and 3.1% in 2019 but the report warned that Brexit meant these projections were subject to "considerable uncertainty".
Mr Donohoe also claimed that seven out of 10 jobs lost in the years since the recession had been recouped.
"The economy is growing at a healthy pace and generating jobs-rich growth," he said.
"Indeed, we are now approaching a situation in which jobs are available for all those who want them.
"Now is the time to build on the gains of recent years, to improve the resilience of the economy and to address the capacity constraints that are emerging."
The Construction Industry Federation criticised Mr Donohoe’s agenda and warned that deferring investment would slow economic growth over the next decade.
Director general Tom Parlon said: "If it’s a good idea to invest in 2019 to improve the economy and address the housing issue, lack of broadband and creaking road and rail infrastructure, why not start today?"
- Reporting by Ed Carty, Press Association