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  • Budget 2023: Fate of our future generations may well hang on what Paschal Donohoe says tomorrow - planetcirculate

    Budget 2023: Fate of our future generations may well hang on what Paschal Donohoe says tomorrow



    Budget day has long been more about politics than about the underlying national economics and finance. Tomorrow at 1pm we will see an even more acute version of this as the “moneybags ministers”, Paschal Donohoe and Michael McGrath, combine to outline our perilous fate for the end of this year and the course of the coming year.

    e already know two things about tomorrow’s national financial package to take us through the end of this year and into 2023.

    First is that, bar the Covid pandemic’s astonishing €30bn outlay, this Budget will be the biggest give-away in this State’s 100-year history. The second is that government critics, in opposition and social campaign organisations will castigate it as insufficient and/or misdirected.

    These are the strangest of times. We had assumed that this Budget would be about consolidating and rebuilding the post-Covid economic shocks.

    Then Russia’s Vladimir Putin sent those tanks into Ukraine on February 24, causing an economic spasm in the western world generally and the EU especially. Seven months on, to the very week, we are back in the depths of the Covid epidemic days – only arguably worse.

    Up until recently, things had been rather happy economically. There were all-time record numbers at work in Ireland; there were eye-watering sums of various tax monies hitting the national coffers; and everything, for once in this nation’s economic history, was headed up, and up, and up.

    Now since late February we have been looking at spiralling inflation nudging double digits in Ireland as prices generally balloon. We also face a gloomy winter when energy costs are driving up heating bills beyond the means of vulnerable, and even less vulnerable, people.

    Granted, we have an astonishing current surplus of €4.4bn. But there is understandable anxiety that these revenues are fickle, based on multinational companies, and may not be there to take us through a crisis likely to go on at least into 2024.

    There is a strong vibe among economic experts that whatever measures are taken must be immediate and once-off, rather than committing recurring spending into future years when tax revenues may be far leaner.

    Tomorrow, Government must help citizens cope with impossible heating and living cost increases. If the principle of community is to mean anything, then there must be serious expenditure.

    But equally, business support schemes to be unveiled must be all about protecting jobs. That initiative will be as crucial as the series of measures to cushion the most vulnerable in Irish society from the spiralling cost of living. 

    The design mix here is crucial – Ireland cannot afford to have higher inflation than other neighbouring and competitor economies. That is what happened in the 1970s and 1980s, bringing untold misery in emigration and joblessness which did not really ease until the mid-1990s. We cannot repeat those errors.

    We have already entered very uncertain times without any sign of stability emerging any time soon. How our Government manages through into the end of this year, and on to 2023, may well dictate the fortunes of rising generations.



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