Déjà vu as Bertinomics Haunts the Land Again – Tóibín
Sinn Féin Junior Finance Spokesperson Peadar Tóibín has warned against a repeat of the failed policies that led to the Great Recession and devastated the country. The Fiscal Advisory Council met with the Finance Committee today to discuss the recent Exchequer figures and projected outcomes of Governments Budgetary policy.
Deputy Tóibín stated:
“Analysing the data, I have an enormous sense of déjà vu. We have many of the ingredients of the 2007 crash emerging again in the economy.
“We have an extremely imbalanced economy. 90% of our exports come from highly mobile FDI sector and we have a government shifting tax revenue generation from personal taxation to a highly volatile, highly concentrated Corporation Tax sector. This is vulnerable to shocks such as exchange rate cuts, CCCTB, a global down turn or even a new American president.
“On top of this we have highly energised, uncontrollable external factors such as exchange rates, interest rates, Quantitative Easing and oil prices driving growth. This is mirrors closely to the property bubble which was fuelled in large part by low interest rates at a European level.
“We are still firmly in an extreme pro-cyclical space. The government’s job is to flatten out the cycle and chart a more stable route. The truth is as a result of the deep economic trough we have now unstable bounce back. Unfortunately hundreds of thousands of families because of the legacy of the crash are locked out of these figures. Wage growth is still limited shown by muted income tax growth. Legacy debt and dysfunctional housing sector have trapped a generation.
“The Fiscal Council believes that the state is close to overheating. The Chair of the Fiscal Council agreed with me that the €4billion in tax cuts, promised by Fine Gael, would consume most of the fiscal space that is needed for public service delivery and it would over heat the economy further unless they were met with expenditure cuts. Given that Health and Housing are dangerously broken it is therefore reckless of Fine Gael to seek to either overheat the economy or do further damage to public services.
“The 2008 crash highlighted the phenomenal weaknesses of the Department of Finance with regards midterm forecasting. We are back to déjà vu territory here again. John McHale concurred with my analysis that the Department does not have the necessary tools to analyse current data and accurately forecast. 8 years after the collapse where many people still find themselves under the rubble of the crash, on the eve of a general election what we see is Enda Kenny Bertinomics and threatening another generation.”