The Fianna Fáil/Green Party government has consistently underestimated the severity of this economic crisis. Its initial reaction was denial and to slander as ‘scaremongers’ anyone stating the facts. Every policy decision since has failed to halt the slide and the Department of Finance’s economic forecasts have been wholly unreliable.
The inescapable fact is that the fiscal strategy adopted by this government has not worked and was never going to work. It still has no strategy to stimulate the economy or to create jobs and its contractionary measures are driving the country into deeper recession.
The current crisis is as much one of ideas as it is of revenues.
In the upcoming Budget in December the government has clearly stated that the majority of savings will come from:
» cutting social welfare payments and cutting the public sector pay bill
» cuts in the health, education and capital building budgets
Savings in the public sector pay bill will not come from the exorbitant wages at the top. Effectively, the poor and the lower paid will pay for the mistakes of the rich and the medium and long term potential of the economy will be damaged. The OECD ranks Ireland as one of Europe’s most unequal societies. The government’s policies in this recession deepen that inequality.
Sinn Féin is fundamentally opposed to these policies because they are totally unjustified and will drive the economy further into recession. We are opposed to them because there is an alternative that will work.
It is possible to get the economy back on the road to recovery but it will require a radically different approach. We need to restore confidence at home and abroad, create jobs and address the growing deficit by raising revenue from those who can afford to pay more. The government is choosing instead to target those on low incomes and social welfare, underdeveloped regions and essential frontline public services.
A more imaginative approach is called for. We can be innovative and start really delivering on the potential of the all-Ireland economy, for example, but there has to be the political will to do so.
Government says recovery has to come from external factors: other countries coming out of recession, an upturn in export markets and a return to previous levels of inward investment. But even if all three materialise, there is no guarantee that this will replace the 14% of GDP which has been lost, or that our economy will then be placed on a sounder footing.We believe that the
first step to recovery is a fiscal policy that taxes fairly, eliminates waste, improves the efficiency of services, and encourages economic recovery. The energy and skills of those 400,000-plus people who are unemployed must be utilised to help build this recovery.
A Budget that invests in the future, creates jobs by building schools, hospitals, the renewable energy sector and business infrastructure will not only work to solve our problems in the long term, but it will also help take the pressure off now.
Sinn Féin has set out detailed proposals to raise €7.623 billion - €5.623 billion through a range of tax revenue measures based on wealth and the curtailment of wasteful spending and €2 billion from the National Pension Reserve Fund, which should be accessed in these exceptional circumstances.
It is our view that in order to move out of recession and into recovery the government needs to stimulate the economy, and it can do this while simultaneously maximising revenue intake so it does not have a negative effect on our borrowing levels. Therefore we are proposing:
» A €3.218 billion economic stimulus package with a range of measures to get Ireland back to work.
» A €723 million household stimulus package to help families in severe financial difficulty due to the cost of living.
» €3.7 billion to be taken in increased revenue that will not have a deflationary impact on the economy, but will bump up state’s coffers.
This submission shows clearly that even in these severe economic times it is possible to raise the finance required to maintain frontline public services and assist those most in need, to reduce the deficit and to deliver
a much needed stimulus package to create jobs and put the state on the road to economic recovery and prosperity.