Government response to Trump-led instability “inadequate and unfocused” says Labour

Labour leader Ivana Bacik has today warned that the government is leaving workers and households “dangerously exposed” to a potential global economic downturn.

The Labour TD was speaking at leader’s questions on Tuesday (January 20), and challenged Taoiseach Michaeál Martin to produce evidence that he was taking threats from American President Donald Trump seriously.

Bacik expressed concern about the “growing instability” caused by Donald Trump’s trade threats and what Bacik called “attacks on international norms.”

The Dublin Bay South TD said”Ireland’s overreliance on a narrow base of multinational corporation tax receipts leaves the country vulnerable to external shocks,” and said that the Taoiseach’s response, thus far, has been “inadequate and unfocused.”

“Instead of engaging with the scale of the threat, he fell back on re-listing past budget measures without addressing how workers and families would be protected if conditions deteriorate,” Bacik said.

The Labour leader said “families across Ireland are already living payslip to payslip, juggling mortgages or rent, childcare costs, energy bills and the rising price of everyday essentials. When economic shocks hit, they are not felt in abstract forecasts or spreadsheets, they are felt in kitchen cupboards, in communities, and in people’s sense of security; this government has failed to prepare for that reality,” she said.

“Today, the Taoiseach’s reply was deeply disappointing. Faced with a clear and growing risk of a global economic slowdown driven by US trade aggression and instability, he side-stepped the issue and offered no plan to protect workers or households. Simply reeling off old budget announcements does nothing to reassure people whose jobs could be at risk if investment stalls or export markets contract,” she noted.

Bacik explained “Ireland’s exposure is well known. Our public finances are heavily dependent on corporation tax from a small number of large multinationals, many of them US-based.”

“Successive governments have failed to diversify our economic base or to use years of strong growth to build resilience. We are cash-rich as a state, but asset-poor as a society. Housing remains unaffordable, public transport is overstretched, and our health service is under constant strain. These weaknesses are difficult in good times and dangerous when a shock hits.”

“Labour has been clear since the pandemic that the government can and should act differently. We have called for a state-backed short-time working scheme, modelled on successful systems in countries like Germany, which allow workers to remain in employment during temporary downturns. Reduced hours, supported by the state and linked to training and upskilling, would protect incomes, preserve skills and sustain local economies. The legal and policy tools exist to do this, but this Government has chosen not to use them.

Bacik called for opposition parties to be looped in on what the government plans to do about the current Trump-induced crisis.

“We have also learned from past crises that transparency matters. At the start of the last recession, warnings were withheld from the opposition, with disastrous consequences. During the pandemic, regular briefings and information-sharing helped to deliver a stronger response. I am again calling for structured briefings for opposition spokespersons on the economic risks Ireland now faces. Workers and families deserve honesty and preparedness, not complacency.

“Labour is calling on this government to take these threats seriously, to put targeted protections in place for workers and to engage openly with the opposition on the risks ahead. Ireland cannot afford to drift into another crisis unprepared. People deserve better, and the government must act now,” Bacik said.