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CSO figures reveal government policy to blame for Ireland’s current recession

25 September, 2008

Responding to this morning CSO figures which have confirmed that Ireland is now officially in a recession period following a drop in GDP for two consecutive quarters Sinn Féin Economic Spokesperson Arthur Morgan TD has this afternoon demanded that the Finance Minister take today's figures as "a significant wake up call".

The Louth TD said:

"This mornings CSO figures reveal a number of key facts that starkly illustrate the primary reasons for Ireland's current economic recess. Government policy of over reliance on construction and consumption has led the country into the current recession.

"Whilst exports are up they have slow downed considerably again illustrating a tremendous failure in government policy to deliver a robust domestic export market of sustainable industries. Government and its agencies must address the states under performing export market, where 94% of exports are currently from multinational corporation bases and not indigenous industry. Recent figures released detailing an 82% growth in the organic food sector is just one example of how indigenous industries can be grown during times of economic challenge.

"During yesterdays Dáil debate on the economy the government praised itself for its 'stewardship of the economy and public finances to date'. You have to ask yourself the question are these living in the real world? They first squandered the boom and then spectacularly miscalculated the state's finances resulting in a shortfall in tax receipts in excess of €5 billion by the end of the year and an exchequer deficit which had reached €8.4 billion at the end of August.

"Government policy produced a high cost base for business, poor competitiveness, bad public services and huge private debt. Their strategy of high indirect taxes means that, as consumer spending falls, the Government will lose still more revenue, putting even greater pressure on the economy.

"To stabilise the economy Sinn Féin is urging the Government to use Budget 2009 in a number of ways. We want job creation prioritised with an immediate re-training programme provided for construction workers to get them into renewable energy, retro-fitting and other industries.

"We want the Government to address our underperforming export market. Approximately 90% of our exports in 2006 came from foreign owned companies based here rather than from indigenous industry.

"And we want the Government to take action to reduce the cost of living pressure on the low paid and those dependent on social welfare by establishing an anti-inflation package that incorporates a reduction or freeze in public services charges including public transport.

"It is also imperative that the Government bring forward a set of proposals to reduce the cost pressures on small businesses, including fast-tracking company law legislation to reduce regulatory burdens while protecting workers' rights.

"There must be a fundamental reform of the tax system to ensure we have both a low and a fair tax regime, but in the interim the Government must use the tax system to assist those on low incomes. Tax breaks and loopholes being used by the super rich to avoid paying tax must be removed and it must be ensured that those at the higher end of the scale are paying their fair share in order to generate sufficient revenue for current and longer-term spending demands.

"In the longer term, we must turn our economy around. We need an economic model based on principles of high quality employment, environmental sustainability, tax justice and world class public services and that is what the Government and we in opposition really need to be talking about." ENDS

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