People better off despite rip-off prices, says Harney

TÁNAISTE Mary Harney last night insisted that despite rip-off Ireland prices and stealth taxes, people now had more money in their pockets.

Ms Harney’s apparent acceptance of inflated prices as a fact of life came as a key economic survey predicted a jobs boom fuelled by higher than expected growth.

The Economic and Social Research Institute’s (ESRI) study forecast growth of 5.7% this year, well above the Government’s 5.1% estimate.

Ms Harney insisted that the strong economic performance since the coalition took office eight years ago was no coincidence.

She added that even if consumer price index (CPI) hikes were taken into account, people were much better off than they were eight years ago.

The PD leader said a single person on average wages had €224 more disposable income per week than in 1997.

“Even if you allow for changes in the CPI which reflect ‘rip-off Ireland’ and so-called ‘stealth taxes’, she is still better off in real terms to the tune of €153,” the Health Minister told party members in Limerick.

Ms Harney said she accepted the Government needed to do more to obtain “value for money.”

In a reference to the Rainbow Alliance alternative, she said that when politicians spoke about re-balancing the tax system, they meant that they intended to pick people’s pockets but were not prepared to tell them up front.

Dr Alan Barrett of the ESRI said he expected the Central Statistics Office (CSO) to revise its official economic growth figures upwards later this year to reflect the booming jobs market.

The latest ESRI Quarterly report notes that employment is up by 93,000 over the past year and that income tax receipts are up 9%. It also points to a record expansion of almost 5% in the Irish labour force.

All of these factors, the report says, suggest that the economy is growing more strongly than the official CSO figures report.

Dr Barrett said the economy was performing extremely well, and predicted that it would grow by 5% next year. He added there were no major clouds on the horizon and no question of a housing market crash.

The economic think- tank’s report also says that interest rates will not rise for at least another year, and it forecasts 50,000 jobs being created next year.

The ESRI says consumer spending will remain buoyant this year with an increase of 5.5%. This will be boosted to 5.8% next year thanks to a rise in spending resulting from the ending of the SSIA scheme.