Budget tax changes criticised by ESRI

The country’s leading economic thinktank has said October’s budget should have been more cautionary, and said the focus on reform of the tax system was “somewhat questionable”.

In its latest quarterly economic commentary, the Economic and Social Research Institute said it had pushed for a neutral fiscal budget which would have given a greater margin for error in achieving the 3% deficit target next year.

“This, we felt, struck the right balance between the need to maintain fiscal discipline and in particular meet the 3% deficit target in 2015 with the clear need to encourage and foster the recovery in the economy,” it said. “We advocated an increase in capital expenditure on social housing of approximately €500 million, which we projected would be offset by the increase in water charges set to be imposed in 2015.”