Numbers in work set to smash all previous records

THE number of people at work in Ireland will break all previous records this year, the Finance Minister has claimed.

The Department of Finance has lifted its growth forecasts for the next four-year period.

The revised forecast is for 5.6pc this year, measured by gross domestic product (GDP), with another 4pc pencilled in for 2019 on the back of strong growth in the labour market.

Employment growth of 2.7pc is forecast for this year and, on this basis, Finance Minister Paschal Donohoe predicted that there would be more people at work in Ireland by the end of this year than ever before.

Mr Donohoe previously predicted GDP growth of 3.5pc for this year and 3.2pc for 2019.

The formal Stability Programme Update released yesterday for 2018-2021 shows that the Government’s growth predictions for 2018 are now higher than the Central Bank of Ireland’s forecast, which was increased to 4.8pc last week. The Central Bank sees relatively stronger growth of 4.2pc next year.

The latest data shows this year’s Budget is essentially balanced. The projected deficit of 0.2pc of GDP projected for this year remains unchanged.

These figures take into account additional Government spending of €2.6bn, of which almost €1.5bn relates to capital spending increases set out in the National Development Plan.

However, the minister warned that “hard-won” gains could not be taken for granted and that there were global threats to the economy.

Mr Donohoe said: “Geopolitical factors that have the potential to negatively impact growth, disruption to world trade and the effect that could have on the global economy, policy uncertainty in the US, and Brexit all have the potential to damage future economic conditions.

“It is imperative, therefore, that we continue to prudently manage the economy and the public finances in an increasingly uncertain world.”

The figures came as French President Emmanuel Macron is proposing creating a new tax on the digital economy to help finance the European Union budget.

In a speech in Strasbourg, Mr Macron called for budgetary reform at EU level to account for Brexit.

He also urged European lawmakers to halt a retreat into national antagonism, asking them to rebuild the European Union as a bulwark for liberal democracy against a disorderly and dangerous world.

He didn’t offer details of his digital proposal, but has called previously for taxing internet giants, which could have a major impact for Ireland.

Taoiseach Leo Varadkar last month outlined his opposition to the tax, saying it is “flawed” and could heighten tensions with US firms.

Valuations

Separately, Mr Donohoe was quizzed on increases in local property tax, amid soaring property values that have occurred since the last valuation base happened.

“There has been a very significant change in values versus the valuation base, and the approach that I would have with any change in tax is that it is always one that is affordable and, if possible, incremental,” he said.

“I think it is important to indicate that all we’ ll be changing in 2019 is how we value, and the earliest point at which the bill will be changing is 2020.

“It is a matter of public concern about will that bill go up by the same amount that values have gone up, and I am looking to address that now.”