Bailout targets met at huge cost

Government policy has met the bailout targets, but at major cost.

Decisions made have produced a fractured society, a weak economy, persistently high unemployment, and emigration. This is not real recovery.

Starting today Ireland needs a new approach which prioritises investment, promotes public services, protects vulnerable people and communities and ensures its development is underpinned by an equitable tax system. In doing this all its decisions have to be sustainable in the long term.

* 1. Investment

There should be a step-change in the level of investment. Without investment there will be no jobs. Without jobs there will be no recovery. Without recovery we will be stuck in austerity for the foreseeable future. Ireland is depending on external economic growth and exports for economic recovery and job creation.

Government needs to adopt policies which will stimulate the domestic economy. A major capital investment programme on a substantially larger scale than currently proposed by the Government would do this. This would create employment and address socio-economic deficits that persist in society by investing in school building, social housing, a nationwide high-speed broadband network, water, green energy, childcare, and rural transport.

* 2. National debt

The Government should generate a major public campaign to secure a break on the national debt. Ireland’s debt-to-GDP ratio will peak at about 120% this year. The Government has spent €64bn rescuing the banking sector. This represents a direct subsidy by the public to international bondholders and the European banking system who gambled irresponsibly in the Irish financial sector. The most recent changes on IBRC have continued this process.

Only if our debt burden is reduced will the economy expand again. Only if the economy can expand can we contribute to a European recovery and ensure all public funds lent to us through the troika’s programme can be repaid in full. A public campaign to address the injustice that underpins the current situation is required to change international as well as some national opinion on this issue.

* 3. Corporate taxation

The Government should positively support the OECD and the G20 in their efforts to produce a fairer tax system that stops tax avoidance that benefits major transnational corporations.

The Government should insist a minimum level of tax be paid by corporations. The corporate sector pays about 2.5% of its total profits in tax in Ireland. If they paid the current 12.5% rate, the exchequer would have an additional €10bn a year, the budget would be balanced and there would be sufficient revenue to dramatically increase investment.

* Seán Healy, SMA, is director of Social Justice Ireland