IMF Managing Director Kristalina Georgieva has called on the Irish Government to prioritise diversifying the country’s tax base.
Speaking to RTÉ’s Six One, Ms Georgieva said the best protection from “this world of uncertainty” is having diverse public finances.
“It is very important for Ireland to diversify the tax base. This world of uncertainty we have entered, it’s not going to disappear.
“So having a sound foundation for public finances means, among other things, diversifying your revenues. And you have space to do it,” she said.
Ms Georgieva added: “Let’s remember one thing … the crisis, when it happened, it was incredibly painful and it led to a recognition that the soundness of public finances is a protection for people and businesses. Keep on that lesson.”
The IMF managing director said the Government was able to “cushion the country” from economic shocks but also called on them to avoid providing support to people who do not need it.
“You are so fortunate to have strong fiscal position. Your debt levels are low, you have surplus in your budget.
“So, you can cushion the country, the economy, the households, better than others in Europe.
“It is very important to provide support when it is necessary, only in a very measured and targeted manner. Please don’t give help to those who don’t need it,” Ms Georgieva said.
She added: “It is so critical that the measures that are taken in the context of this energy shock are temporary, they’re well targeted, and we know that we are not going to suppress price signals. Because price signals make us more economical in how we use energy.”
Ms Georgieva described the housing supply in Ireland as “tight, but not unresolvable” and urged the Government to incentivise people moving outside of heavily urbanised areas like Dublin.
“Right now, Dublin is the concentration of people and businesses.
“You can be more open to spread the solution to the housing problem across the country.
“If you have the digital infrastructure in place that allows remotely to work from anywhere, and if you create the incentives for people to build houses, buy houses, outside of congested areas, that is a way to reduce pressure where the pressure currently is,” she said.
Ms Georgieva added: “But I can say this, Ireland has a lot to be proud of. And that mindset, solution-oriented mindset, is what you need to deploy.”
