Employers’ organisation IBEC today said that the main issue facing Ireland in the year ahead is the stability of our public finances.
Releasing its submission on the next Budget, the group recommended no tax or PRSI increases, a €2.5bn reduction in current expenditure, an overall reduction in the size of the public sector, a 5% reduction in the public sector wage bill and maintaining an ambitious programme of capital investment.
Director general Turlough O’Sullivan said: “Unless very serious corrective action is taken - beyond that already announced - the public finances will deteriorate considerably further in 2009.
“We cannot allow this to happen. This could have far reaching implications for Ireland’s position within the EMU and would be extremely damaging to the country’s reputation in the international investment community.
“If we show courage and judgement now, Ireland will weather this storm and will be in a solid position when there is a resurgence in global economic activity.
“Without further measures, the exchequer deficit as a percentage of GDP at 10% will be the highest since 1986, while the general government deficit would be more than double that allowed for in the EU Stability and Growth Pact.”