Use fruits of economic recovery to serve society

It now seems virtually certain that the general election will be held in the spring following some intense, but ultimately misguided, speculation that the event would occur in November. It also seems certain that whoever forms the next government will inherit an economy experiencing a strong statistical recovery.

I use the term statistical recovery because it doesn’t quite feel like an economy that is growing at a rate just shy of 7%.

Unemployment is still high and, for many, the ability to obtain work is challenging; the public finances are still in deficit; there is a serious housing crisis; many retailers are still finding life challenging and for the Small and Medium Enterprise (SME) sector the economic and business reality is still challenging.

Looking out to 2016, it appears likely that the so-called statistical recovery will gradually develop into something more meaningful and the problems outlined above should slowly improve.

The biggest threat to this benign outcome is undoubtedly external, with uncertainty over China the biggest global issue, but the stubbornly weak growth background in the eurozone will remain a source of significant concern.

Earlier this week, I spoke at a seminar organised by a party that is a recent addition to the Irish political scene, as a neutral and independent observer and somebody who has never been and never will be a member of a political party.

The theme of the night was to consider Ireland’s economic future. As is always the case, the keyboard warriors were busy on Twitter throwing insults at the leader of the political party and myself.

That is par for the course in this age of social media madness and cowardice, but I was taken aback by a comment from somebody bearing a strange pseudonym stating that “Irish people arent a economy” (sic).

I presume he or she meant that society is more important than economy. If that is what was meant, then there is some truth in the observation, but I would counter with the argument that it would be nigh on impossible to build a society without first having an economy.

After all, it is economic growth that generates the financial resources that can then be used to create a better society.

That person was obviously not at the seminar, as the key theme of my talk was to identify the challenges facing the country in the short-, medium-, and long-term, and also the challenge of ensuring that the fruits of economic growth are actually used to improve the quality of life for as many people as possible.

In my experience, it is amazing how many people react to what they think you are going to say rather than what you actually say.

It reminds me of the tattoo that the former Waterford hurling star, Dan Shanahan, had on his arm, stating: “If you don’t know me, don’t judge me.” I apologise to Dan if I have misquoted his tattoo, but that is the message he was trying to impart.

Unfortunately, in the world of social media, such niceties do not apply and for many it just presents an opportunity to be as nasty and vindictive as possible.

In any event, what I was arguing on the night is that we need to ensure that the fruits of the economic growth we are currently experiencing are used to the greatest possible extent to improve living standards.

Much of the growth of the last boom was used to boost public sector wages and engage in very populist policy-making.

This time around, we need to achieve a balance, with investment in essential public services, such as health, education and law and order. We need to invest in physical and IT infrastructure; and we need to ensure that the balance between personal taxation and social spending is such that work is encouraged, rather than discouraged.

We also need to provide real assistance to SMEs and encourage risk-taking, entrepreneurship, and employment creation. In short, we need to use the economy to enhance society.


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