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IMF report - latest in a litany of Fianna Fail failure exposés

25 June, 2009

Responding to the International Monetary Fund’s (IMF) report on the Irish economy Sinn Féin Economic Spokesperson Arthur Morgan said, “There are two issues to note on the back of the IMF’s report. For over a decade successive Fianna Fáil led governments have been loudly warned against making the Irish economy over reliant on consumption and construction. The IMF is just the latest in a litany of economists and organisations to highlight this fact. However we need not lose sight of the inequitable agenda of the IMF. There is much in the IMF report that Sinn Féin does not agree with, such as its support of public finance cuts and bank bail outs.”

Deputy Morgan said:

“There is broadly nothing new in the IMFs report analysis of the Irish economy and the reasons for our current recession. Fianna Fáil led governments were warned for years in advance of the recession that measures needed to be taken to curb the dangerous over-inflation in the housing market and to avoid the creation of a property bubble. They were warned about the dangerous over dependence of the exchequer on fair weather taxes. Minister Lenihan has some neck stating that the opposition failed to come up with alternatives during the boom years to avert the current crisis.

“Sinn Féin opposed the reduction in capital gains taxes which made it more profitable to speculate in property than to run a business, we opposed tax breaks that favoured investors over those trying to secure their first family home, we asked the government to explain why it was allowing the banks to over-lend to first time buyers (including through the provision of 100% mortgages) we supported the introduction of a tax on second homes that would have curbed the escalation of house prices and the development of a bubble.   

“Throughout my time as Sinn Féin’s housing Spokesperson between 2002 and 2007 I vigorously pursued those issues in the Dáil. Time and time again Fianna Fáil Ministers dismissed this, claiming that there would be a soft landing in the property sector. In equal measure Sinn Féin has for years questioned the sustainability of the existing tax system. Fianna Fáil bought the 2007 election on economic promises that they could not deliver. They either lied to the people at that time or were so economically illiterate they did not see the crash coming. Either reason makes them unfit for government.

“However there is much in the IMF report that Sinn Féin strongly disagrees with and we do so in the context of noting the global agenda that the IMF like the World Bank represents. The reality is that the policies of the IMF and the World Bank have locked third world nations into a vicious cycle of borrowing and repayment of loans and interest on loans that can never be paid. To make matters worse, these countries are forced to adopt economic policies that force further reductions in social welfare spending.

“There is much in the IMF report that is in agreement with the government’s current policies, for example the slashing of Ireland’s public finances and the government’s black hole approach to bailing out developers and bad banks. This report, like the IMF agenda, is a damning indictment of the low taxation – low public spend ideology of western governments that have dominated global economic decisions since the 1980s.

“The government needs to deliver an economic stimulus package that includes a properly funded job retention and creation strategy as well as real investment in infrastructure and public services. Saddling future generations with unprecedented debt and undermining Ireland’s social and economic future is not a recovery plan, it’s a perpetuation of bad policy and inept decision making.” ENDS

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