Labour TD for Louth Ged Nash says the government have ‘failed to do enough’ in their €5 billion July stimulus plan, citing a failure to focus on supporting the consumer as a “fundamental mistake.”
The Labour spokesperson for Finance and Public Spending was speaking on Thursday evening, shortly after the coalition government announced their much-anticipated July stimulus package, aimed at boosting and supporting the economy and employment as the country returns to some form of post-lockdown normality.
The measures announced included a 2% cut in VAT – from 23% to 21% – for a six-month period, a €100 million package of employment supports to deliver 47,500 training and apprenticeship places and a €450m package of business supports.
The much talked about staycation rebate was also announced, amounting to €125 per person, based on a spend of €625.
Nash said that the government had failed to meet the Labour Party’s ‘five tests’ for the stimulus and that it “lacked ambition” and failed to “put real money in people’s pockets that would be spent locally sustaining jobs and businesses.”
“The July Stimulus should have seized this one-off opportunity to direct our economy in a new more caring and sustainable direction, to reduce economic and income inequality and to invest in public services like healthcare, housing and education,” he said.
“I welcome some of the initiatives in the Government’s stimulus package, including an extension of the Temporary Wage Subsidy Scheme as a short-time working scheme, which is something Labour has called for repeatedly. The devil will be in the detail and the scheme must come with strings attached in terms of lay-offs, training and the displacement of existing full-time jobs.
He also welcomed the announcement of the new training and upskill programme and the VAT cut, but said the former was underwhelming.
“Labour’s call for a 2% cut in the standard rate of VAT has been endorsed by plan, but the reduction must find its way into people’s pockets. The ambition in the plan is sadly lacking.
“There is a serious risk of the July Stimulus being too little to save many viable jobs. As a result, it will cost more to get people back into new jobs and businesses in the future by not thinking big now,” he said.
“It is also a fundamental mistake for the Government to focus support on businesses exclusively rather than consumers too. Labour called for a €10 rise in social protection payments as we know this money will be well spent in local areas, boosting businesses on main streets across the country.
“While the tax refund ‘Stay and Spend’ scheme for hospitality may help the tourism sector, it fails the test of economic inequality. Those on the lowest incomes and those who have lost their jobs will not be able to avail of this scheme as it appears to require spending of at least €600.
“It is also not likely to create good quality jobs, as tourism is a low wage sector with many precarious and part-time jobs.”
Deputy Nash did welcome the investment in town centres, cycling infrastructure and school minor works is a welcome investment in public services and acknowledged that the government made “some headway.”
“They have still failed to do enough to match Labour’s ambition for this country.”