Fianna Fáil/PDs ‘can not claim credit for fiscal success’

IRELAND’S economic achievements over the past decade can not be attributed to the neo-liberalist approach taken by the Fianna Fáil/PD coalition, Labour leader Pat Rabbitte said last night.

Speaking ahead of his party’s major policy paper on the economy on Monday, Mr Rabbitte last night attacked what he described as the PD-dominated economic philosophy of the coalition, as articulated by Justice Minister Michael McDowell.

He rejected the assertion made by Mr McDowell that without the liberal market economics pursued by the coalition since 1997, “there would have been no Celtic Tiger, no turnaround, and no boom”.

Mr Rabbitte, who was speaking at the MacGill Summer School in Donegal, said an analysis of the historical record showed that in its three-year tenure between 1994-97, the Rainbow Coalition had more than matched the best years of the FF-PD government in terms of economic performance.

“As for the growth rate, GNP grew by an average 8.6% per annum in the three yeas that the Rainbow Coalition was steering the economy, compared to an average 5.7% in the next six years under neo-liberalism. And in Mr McCreevy’s three best years GNP averaged 8.7%.

“Taking a look at inflation and employment, Mr McCreevy inherited an economy with an inflation rate of just 1.5% and was creating 55,000 jobs a year,” he said.

At the core of the argument was the claim of the Coalition that its major tax reduction packages had ushered in the Celtic Tiger, said Mr Rabbitte.

“Contrary to the claims of the neo-liberal right, the major tax reduction packages of the 1990s were introduced after the boom began, rather than before it.

“No minister came into the House to tell us that he was taking a punt on the future, by cutting taxes to initiate economic growth.

“On the contrary, tax reduction packages were part of a strategy worked out with the social partners to trade off tax reductions for wage restraint, and so add to the competitiveness of the economy,” he said.