An increasing pension pot with an aging population, €37 billion of debt to refinance between 2027 and 2030 and the possibility of missing an EU greenhouse gas emission target resulting in a fine of between €3 billion and €28 billion are some of the problems facing our economy.
This is according to an Irish Corporate Treasury and Debt Financing expert ahead of the publication of the Government’s Summer Economic Statement tomorrow.
John Finn, the Managing Director of Treasury Solutions, believes Ireland is going to miss the opportunity of a generation with the extraordinary corporation tax take it has.
He is concerned the growing deficit and falling surplus here could “leave us in a jam”.
Speaking on RTE’s Morning Ireland he expressed his worries about a ‘repeat of the Celtic Tiger’.
“We’re spending money on services and funding it by what we call extraordinary tax receipts, meaning that it’s not repeatable in the medium term,” Mr Finn said.
“I think what everybody agrees is that the level of cooperation tax take from a small number of multinationals is going to run out,” he stated.
In media reports over the weekend the Tánaiste and Minister for Finance Simon Harris said he would look at tax cuts over the next four budgets.
Mr Finn said the Government needs to look at how they want to run the country’s finances.
“Is it going to be free market or is it going to be more left-of-centre socialist, we don’t need to reinvent the wheel we just need to look at who’s doing it well,” he said.
“We’re a small country, 6 million people,why don’t we just take the best in class and copy them?”, he added.
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Numerous authorites includig the National Competitiveness and Productivity Council, the Irish Fiscal Advisory Board and Social Justice Ireland recommend investment in and modernising public services.
Mr Finn advises Ireland needs to be more pro-active rather than reactive and that future proofing is “where we should be”.
He warns unless there is a lot of critical thinking and difficult choices politically, we will walk ourselves into a problem if we do not address it.
“We should be using this extraordinary tax take to bolster infrastructure spending and all that other stuff, but the bit that scared me a little bit was talking to people in the multinational sector,” he said.
“Some people believe that this extraordinary level of corporation tax receipts could literally be diminished or gone in the next three to four years,” said Mr Finn.
He added that the challenge for Government is to turn this around and fundamentally change how we do things and manage our finances over the next four years.