Budget 'must relieve consumer fear'

Monday, 6 December 2010

The Budget must convince worried shoppers that no more cuts are on the cards, business chiefs have warned

The Budget must convince worried shoppers that no more cuts are on the cards above those flagged, business chiefs have warned.

Lobby group the Irish Business and Employers Confederation (Ibec) said cash-strapped consumers remain too afraid to spend.

The body said the focus must be on returning the economy to growth.

Danny McCoy, Ibec director general, said: "We know the scale of the budgetary adjustment required, but how it is achieved is just as important.

"We have choices. The focus must be on cutting expenditure rather than raising taxes and ensuring that, when revenue is raised, it is done in a way that is least damaging to growth."

Mr McCoy said the country would not recover from the crisis unless the economy begins to grow.

Ibec said the budget must also ensure the cost of business is reduced and that potential cutbacks in agency and departmental budgets do not see higher costs passed on to companies.

The body also warned that the introduction of a new universal social contribution, flagged up in Budget 2010, does not give rise to a higher marginal tax rate.