ESRI warns new finance minister against stimulating the economy with tax cuts

The Economic and Social Research Institute says the labour market is expected to remain strong with unemployment remaining just above 4%

The warning comes ahead of the summer economic statement which is due to be released next month. 

New Finance Minister Jack Chambers will have to show discipline when it comes to fiscal policy to ensure that the forthcoming budget does not “additionally stimulate the economy” through unaccounted for tax cuts, the Economic and Social Research Institute (ESRI) has said.

The warning comes as Mr Chambers prepares for the summer economic statement, due to be released next month, which will set out the parameters of the budget later this year. This will be the last budget of the coalition Government before an election is called.