His finance minister experienced a major pandemic, panicking, and defensively crouching, both calmly and ingeniously to overcome potential catastrophes and move the economy.
But instead of pushing the big red austerity button on Melion Street’s desk, he generously spends two years on wage subsidies, tax exemptions, and generous unemployment benefits, and a better future is the other side of uncertainty. I bet that it is in.
Now that future has arrived.
Each Exchequer update is better than last time, as the Covid-19 is mostly behind us, so the recovery is moving forward. Finances are balanced faster than planned. In fact, a healthy surplus was recorded in May, surpassing the most optimistic readings of the year’s budget estimates.
So why is Donoho always struggling to talk about Ireland’s financial achievements when he needs to tap dance like Gene Kelly in the summer shower of euro coins?
His department has yet another record monthly tax burden or quarterly growth than throwing a bucket of ice water over his own head, as if he might overheat from the good news. I’m selling the numbers.
Here he attended the Budget Meeting of the Institute of Economics and Social Studies yesterday. The meeting will begin choreography until October Budget Day.
“The era of cheap funding has arrived,” he said, referring to this week’s confirmation by the European Central Bank that interest rates will rise from July.
As expected, Irish government bond yields are close to 2%, the highest in eight years. This isn’t the free money we’re used to, but it’s not that much.
“We are aiming for the lowest level of borrowing needed to respond to the various developments and tensions that are taking place in society and government,” he continued.
“Of course, we continue to recognize and support the cost of living challenge, but overall, we need to prepare and provide a budget that does not add itself to the apparently ongoing inflationary pressures.”
It’s bad! Just a week ago, you never know that the exact same finance minister announced that this year’s tax rate has risen by 27% against the backdrop of very strong VAT, income tax and corporate tax receipts.
Still, Donoho warned that inflation and monetary tightening policies were a difficult background for public finances, but the rude health of the domestic economy is evident in the returns of deportation.
It is clear that the minister anticipates a tsunami of spending demand in the coming months, not only a real risk to Ireland’s economic well-being, but also a memory of the traumatic people of the economic misconduct that preceded the financial crisis. Thinking about it, I’m desperate to manage my expectations.
To be fair, the indicators do not point in a clear direction. Inflationary anxieties have become a reality and are now plagued by all areas of the economy, from manufacturing and construction to retailers and restaurants. It is not yet known if the ECB can expel it into the world of hell, far from Donoho’s rule.
As he pointed out in the release of Nama’s annual report, domestic demand, the best measure of Ireland’s economic growth, slowed in the first quarter as consumers cut spending to cope with higher prices. did.
That same inflation is also somewhat flattering the state’s tax revenues. As prices and wages go up, so does the amount of value-added tax collected, people’s income, and corporate profits. In addition, the year-over-year comparison with Covid-stricken 2021 certainly contains one or two financial illusions.
On the other hand, the employment market is probably the strongest in living memory, wages are improving, and both businesses and households have abundant savings. In addition, the Treasury Administration (NTMA) has done a great job of pre-funding state spending requirements while reducing debt repayment costs.
Donoho is his own in a horrifying bedtime story that the Fine Gael has told over the years that Ireland is one of the most cared for per capita in the world. Is it possible that you are scared of the magic trick demon?
For the past decade, the Fine Gael brand has corrected the turmoil left by Fianna Fáil in 2011, but rehashes the lessons of a major financial crisis if there are closer and more informative examples of the Covid crisis. You don’t have to continue. Learn from.
When faced with the shock of a pandemic, Donoho was able to act with agility, determination and imagination. The wage subsidy system, which poured 10 billion euros into sick companies in two years, influenced policymaking as it opposed the type of fiscal restraint party.
Without the crisis to put him into action, Donoho seems to be returning to the type with a focus on the financially comfortable job of paying off debt-a necessary but not sufficient condition for a healthy economy.
October is an opportunity to do the following, not the old ones.