Economist Jim Power predicts no major budget pay-off for Coalition
Economist Jim Power said: 'Budget 2024 was the third generous budget in a row, but the opinion polls suggest that this won’t change the fortunes of the main political parties in the local and national elections.'
The Coalition parties could pay a high electoral cost for their failure to use the budget to accelerate investment in housing, economist Jim Power has said.
Speaking at a business event in Kinsale, Mr Power said the housing crisis required a "crisis management" strategy akin to the State’s cross-departmental response to the pandemic.
He said that the high levels of corporate tax returns meant the domestic economy had performed "particularly well”, despite the crises of Brexit and soaring energy costs since Russia’s invasion of Ukraine.
“However, housing is one big area where we would have to be critical of the government. Housing has never been given the crisis status that it deserves," Mr Power said.
“Budget 2024 was the third generous budget in a row, but the opinion polls suggest that this won’t change the fortunes of the main political parties in the local and national elections," he said.
Mr Power said Budget 2024 had spread its €14bn pot too thinly across Irish society, missing the opportunity to target housing supply and other key areas, notably the lack of effective measures to support renewable energy and measures to offset the huge costs facing small businesses, including farmers.
He praised the Government's management of the domestic economy against a backdrop of global turbulence, which he compared favourably to the policies in economic periods in recent history, including the stagflation in the 1980s, the oil crisis of the 1970s, and the banking crisis.
“The weakness of corporation tax receipts in August and September is also a cause for some concern, as the tax take is very heavily reliant on a small number of large multinational companies,” he said.
"We think that might be a post-covid technical adjustment rather than a fundamental adjustment, which would mean that Irish pharma and chemical sectors remain strong,” Mr Power said.
Directing investment towards smaller indigenous businesses would be strategically important to support employment creation within the domestic economy, he said.
While praising the achievements of Enterprise Ireland and the IDA, he said many small companies would never become exporters. As such, he said they needed a dedicated State agency to promote their interests.
Mr Power was speaking at a Kinsale Lions Club briefing in aid of a children’s unit at CUH’s emergency department.
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