Widening the gap between haves and have nots isn’t a recovery plan

THE Government is busy preparing a three-year detailed budget for the country.

And for many people the question is will it include more tax or more cuts, and how much will it cost them.

Recent statements from the Taoiseach appeared to suggest that the answer was largely up to the nation’s lenders, the ECB, EU and IMF.

But they all are quick to respond that in fact the choice is up to the Government — their main interest is in making sure that the bottom line remains the same, with the country’s debt and deficit being reduced.

At least there will be one good thing out of this whole exercise — politicians will never again be able to bribe voters using taxpayers’ money to promote themselves. The three-year budget due in October, together with the raft of legislation being put in place now, will see to that.

In future every item of expenditure and every cent used to pay for it will have to be named in advance and accounted for, department by department. An independent — if that’s possible in Ireland — fiscal council will be in place to act as a kind of super-housekeeper to ensure we are not living beyond our means.

And any government that fails to stick to the limits will be capable of being sued by any citizen once the debt cap is enshrined in law.

In the meantime, the loans must be repaid and much of the work is on ensuring this can happen and in stimulating the growth needed to make it happen. As usual much of it will be built on the backs of the poorer paid.

Economists argue that Ireland must regain its place in the top 10 of most competitive places in the world in which to do business; this means lowering the cost of employment. It also means increasing job opportunities. But so many of the unemployed are unskilled ex-construction workers that there is an emphasis on creating cheap jobs. And to get them to take such work, all the perks of being unemployed have to be removed.

This is now under way — as we will see in the coming budget — and next up are the areas not open to competition like lawyers, doctors and other services. Efforts in the past to open up these areas failed — partly because they lobbied successfully. Let’s see if this can be changed.

Unfortunately, the quality of service we get for our money is not part of the programme. So whether taxpayers’ money goes to fund myriad layers of managers or the nurses that deliver the health service, for instance, will be up to the politicians.

The assumption that employers must be bribed with ever-increasing profit to create jobs is not being questioned either. There is no research planned on the level of profit expected by SMEs or others and whether they are too greedy and building their businesses on the backs of people whose pay is kept low by government, or whether there are other ways to help employers create jobs and contribute meaningfully to the nation’s recovery.

The EU and the IMF personnel in charge of overseeing and implementing the country’s austerity measures are almost embarrassingly fulsome in their praise of the Irish professionals they are dealing with.

These experts are obviously excellent in dealing with a crisis situation. October’s pre-budget paper will encompass a lot of the way forward in paying down the debt. But what is needed now is a recovery strategy that does not depend just on widening the divide between the haves and have nots in the country.