Growth and stimulus the only route to recovery – McDonald tells MacGill Summer School
Speaking tonight at the MacGill Summer School in the Glenties, Donegal Sinn Féin Deputy Leader Mary Lou McDonald TD argued that growth is the only game in town but the government has so far remained on the side lines.
Deputy McDonald said:
“Last week the Government
gave itself a 94% success rate on delivery of measures in the second quarter of
its action plan on jobs. And yet, all the key economic indicators, as the guide
to this discussion points out, are negative.
“In June 2011, unemployment was 14.4%. In June 2012, we had an unemployment rate of 14.9%. Since the start of this year, 740 businesses have gone into insolvency – 155 in the month of May alone.
“It seems to me that the Government’s action plan on jobs is ticking all the boxes, bar one – creating jobs.
“To be fair to the Government – they have already acknowledged this. In the same week as patting themselves on the back for achieving their own unambitious targets, they unveiled a €2.25 billion six year stimulus plan.
“When Sinn Féin first proposed the idea of a stimulus in December 2008, we were told that it was not needed. Subsequently we were told it would not work. After that we were told - including by members of the current Government - that there was no money for a stimulus.
“Perhaps the Government’s stimulus announcement is best described as stimulus for slow learners – because while the premise is now accepted, the scale of the stimulus required appears to be sorely misunderstood and the broad contours of other government policies run against the grain of stimulating the economy.
“Indeed we have the bizarre situation where the Government that has axed capital spending yet claims kudos for introducing a stimulus package. Let’s not forget the real net gain of the announcement is a mere €800million euro to be spent over a five to six year period.
“We have a deficit problem in this state that must be addressed. There are a range of taxation and savings measures that can be used to do this. However we differ, radically differ, with the Government on what those measures should be, and we all agree on the end game of deficit reduction.
“Sinn Féin has always pointed out the need for growth and how a stimulus could kick-start this. This has been the over-riding theme of all our economic publications for the last four years and will be again in our jobs recovery programme to be published this September and our pre-budget submission later in the year.
“The state does have the capacity to introduce a substantial Government-led stimulus, supported by the private sector and backed up by other measures which do not require financial input but can make it easier for businesses, entrepreneurs, co-ops and state enterprises to create jobs. This has to be complemented by deficit reduction measures which do not deflate the domestic economy and drag out the slump in consumer spending.
“The Government’s net stimulus of €2.25 billion over six years can only be described as a drop in the ocean. It has to be seen against a sustained attack on capital investment spending. Fine Gael and Labour intend to cut the capital budget by at least €1.4 billion over the lifetime of this Government.
“Austerity will not cure the deficit. Growth is the only game in town but the government has so far remained on the side lines.” ENDS