Tax cuts in budget would be big mistake, says economist

The Government was wrong to promise tax cuts in next October’s budget as the uncertain economic backdrop makes it unlikely it will be able to deliver, according to a leading economist.

“The Government should not be doing this at this time. There should be no tax cuts for middle- income earners because it potentially exposes the economy to another shock,” said Stephen Kinsella, economics lecturer at the University of Limerick.

And in possibly a further setback for the Government, the record low yield on the 10-year bond issued by the NTMA could undermine its attempts to negotiate a debt deal with EU authorities, he added.