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Government economic analysis galling in its denial

24 September, 2008

Speaking ahead of this evening's Dáil debate on the economy Deputy Morgan has slammed the government for refusing to acknowledge the fiscal realities that the states faces due to successive Fianna Fáil led government's failed economic policies. Deputy Morgan also stated that the opposition has a responsibility to offer responsible solutions as to how the Government can dig itself out of this mess in the short and medium term, while protecting the most vulnerable who have so often in the past proved a target for Government cuts.

The Louth TD said:

"The amendments to this evening's Private Members Business begin with the government commending itself for its 'stewardship of the economy and public finances to date'. Fianna Fáil 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's arrogance in the face of such damning evidence is galling.

"Without doubt, some of what we face today can be attributed to the international credit crunch and a global downturn which has seen major investment banks collapse.

"However Irish banks were not exposed in any comparable way to the sub-prime catastrophe that has hit the world's financial institutions. Years' of domestic credit made freely available to developers and speculators have allowed this states economy to develop on the back of an unstable and unsustainable property market.

"The Government presided over many investment failures with regard to value for money - no major infrastructural projects came in on time - and strategic investment was not made in national broadband, revitalising rural Ireland, public transport and renewable energy.

"The Government also failed to invest in measures to combat poverty. As a consequence, almost 300,000 people live in consistent poverty, and, will remain there if this Government has its way.

"It boasts that the fundamentals of the economy are sound, despite economic growth in this state being driven by unreliable domestic consumption rather than robust export policy and sustainable industry.

"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.

"A Government response to the current situation which seeks to address the shortfall in public finances by resorting to cut backs in public services is not acceptable. Our public services are already characterized by a lack of capacity and quality. Out of all of Europe, only Estonia and Lithuania have lower public spending than us. However, there is of course a need to look at how and where the Government has been wasting public money over recent years. Waste and duplication must be eradicated, nut let's not kid ourselves about this 'black-hole' in public spending. It doesn't exist.

"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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