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  • irishtimes.com - Posted: November 24, 2010 @ 2:02 pm

    Dial D-A-I-L for economic carnage

    Laura Slattery

    “What can the Government do to boost growth?” it asks on a fold-it-and-keep wallet-sized summary of “the National Recovery Plan, 2011-2014″. There will be plenty of room for it in our wallets anyway after it’s finished mopping up its mess.

    Well, it’s going to start by hacking 24,750 jobs out of the public sector and cutting the minimum wage by €1 an hour to €7.65 (which will inevitably have the knock-on effect of deflating the salaries of all low- and middle-income earners). Not permanently employed but have managed to scrape together enough hours to get by? The point at which you will start paying tax will drop to €15,300, a fall of €3,000, by 2014. All tax credits and bands will drop by an aggregate 16.5 per cent by the end of the “recovery” period.

    It’s going to follow this up by “reform[ing the] welfare system to incentivise work and eliminate unemployment traps”, which is fantastic, as we all know it’s merely the lack of incentive to get out of bed in the morning, not the jobless economic deep-freeze, that’s causing all our woes. Social welfare expenditure will be €3 billion lower a year by 2014 – the details of this particular misery have not yet been spelled out.

    Thinking of waiting out the recession with, I don’t know, a decade’s worth of education? That’s going to cost you €2,000 a year, as annual student fees increase 33 per cent.

    But if salaries and welfare payments plummet, then that’s okay, right, because we’ll be more “competitive” and things in the shops with be a lot cheaper? Hmm. Not so fast. From 2013, there will be an increase in the standard rate of VAT – the tax that hits poorest people most – from 21 per cent to 22 per cent, with a further increase to 23 per cent in 2014.

    There’s lots of insulting guff inspiring words in here about “a blueprint for a return to sustainable growth” and “identifying the areas of economic activity” that will allegedly provide employment. There’s also mention of confidence… vitality… dynamism… proportionate adjustment. The Business Expansion Scheme will be replaced by something called the Business Investments Targeting Employment Scheme, aka BITES. I’m not sure they’ve thought that one through.

    And then: “We must all accept our share of the burden so that we can collectively share in the fruits that will undoubtedly flow from solving our current problems.” So, what do you think? Do you have confidence that one day you will get to share in these magical, future fruits? Or has the Irish economy already rotted away in the stale IMF air?

    • John Hoare says:

      I’ve read the ‘plan’. I have only three things to say, first if the EU and IMF technocrats do not recognise that the sums are all wrong and kick the whole thing to touch immediately they should be fired on the spot. Second, the greatest burden imposed by the proposals in the plan would be borne by those least able to pay.
      Last but not least, given that the plan presented has no hope of delivering what it promises and indeed is most likely to increase expenditure as a percentage of exchequer income the government must be brought down before they can implement any part of it. Not next year, next month or even next week. Today.

    • h canu says:

      I agree that this plan seeks payment from those least able to pay. However, this plan is not for the Irish. The plan is to make British, French and German banks whole on their Irish bondholdings. Instead of requiring borrowers and creditors to both take responsibility for the financial folly they participated in, the Irish Govt wants innocent bystanders to pay – and pay for generations. Too bad the Irish have not yet gained the balls of Icelanders, who voted out their complicit leaders and held the marauding foreign bankers at bay. It took Icelanders some weeks, maybe you too can come to your senses.

    • Ferdinand says:

      I am an American and you could see this all happening in slow motion since 2000. A perfect example of this happened to me on a cold October day in 2006 when I took the DART to Howth. As I viisted Dublin often, I would go there to look at the sea and have a pint. There was hardly anyone on the train and the conductor, striking up a conversation, told me that he was proud of all the EU money coming in to Ireland and that some of it would be used to upgrade the DART. In the next breath, speaking his conceived truth but not understanding the implications, he said that the unions should be much admired for pushing such projects to conclusion. He further elaborated that, and I kid you not, that Ireland was benefiting as a ‘socialist state.’ Well, the bubble burst and the unrealistic dreams of the socialists are forever destroyed. I hope that another mass migration of the Irish is not the next result. I guess another chapter in the lives of Dubliners.

    • Bryan Barrett says:

      For the elected guardians of the state and its trusting citizens, to impose the terms of this outrageous diktat on the people of Ireland is treasonous. That the outcome will inflict such pain on the people of my native land for generations to come has no precedent. That the government has put the position entered into with eyes wide open by the banksters, fraudsters, inept politicians, foreign investors of all stripes, and foreign, yes EU and IMF manipulators, to whom the nation has been handed over lock, stock and barrel, ahead of the population of Ireland, is grounds for impeachment here in the U S, and I pray that it is Ireland too. If the Constitution of Ireland allows such a course, or has similar or equal provisions, please act to protect your freedom and the future of your children and future generations.

    • John Hoare says:

      That was the Bertie Ahern legacy talking. You probably remember that he was the Taoiseach before Brian Cowan. Bertie’s greatest single talent was his ability to lead anyone he was dealing with to believe that he was of the same political stripe. So to the trade union members he was a socialist, to the developers and the entrepeneurs he was a capitalist and to direct investors from overseas he was practically Libertarian. But he was always Fianna Fáil. A political pragmatist and opportunist who left no stone unturned in the effort to ensure that his party retained power. Nothing more, nothing less.

      And that’s our biggest problem. None of our politicians specialize in governance or legislating. They are all specialists in the most basic aspect of the political process – winning and then retaining power. They would happily appoint an undertaker as Minister for Health, a doctor as Minister for Defence, a teacher as Minister for Finance and a social worker as Minister for Foreign Affairs, without a single thought for what qualifications might suit the posts. So we have people managing our country that would never be considered for the equivalent jobs in even the most cash-strapped startup company.

      I would say ‘You get what you pay for.’ but it wouldn’t be true. We pay them a hell of a lot more than they will ever be worth.

    • leargas says:

      Further to the Icelandic response to their financial woes. Why is everyone so silent about the fraud that was perpetrated in our banks? Where are the accused? Why are our politicians (and by default) the IMF and EU) not baying for answers?

      That defening silence infers complicity….

    • i shot the tiger says:

      i agree with you there h canu why dont the banks take a hit whats going to sicken me is the profits these banks will make by manipulating the market in the near future will be huge and irish people will still be paying for generations as serfs toward these banks ok their was light touch regulation here and cowen and co went along with their developer friends and irish banks but how did european watchdogs not see the huge amounts of money going to ireland and say what us it all about

      these loans given to irish banks from the eu will need to be dropped if we have any change of getting out of this fine mess and is any party going to offer restructuring of the dail or will they not care once they get their seat. wont make much difference as they will have no power only to be yes men to the imf

    • jed clampett says:

      as an american where maybe the highest sales tax in any state is around 10%, it’s hard to even imagine a 23% VAT. i guess it’s not such a big jump from 22%, but why does anyone buy anything if you have to give almost 1/4 to the State on top of it?

      none of my business but i think it’s criminal that the plan doesn’t raise the ridiculously low corporate tax rate, don’t you?

    • sick of these gangsters says:

      LIARS & GANGSTERS.they dont give a fiddlers about the people on the ground. cut ur wages and expenses and give it back to the people. our children have no future with your so called plan YOU’VE SOLD US OUT GET OUT OF GOVERNMENT NOW

    • Ferdinand says:

      Jed, Ireland has a massive issue on corporate taxes and I might add that the US has a problem as well. Ireland has a 12.5% C Tax rate; however, with a small population, few industries and natural resources, it is imperative to keep C Taxes low in Ireland else it will not stand a chance of survival. The US has a the highest C Taxes in the world with a marginal rate of 45% when considering state and federal levies. The US needs (and the Republican Congess is behind it) to lower these unfair restraints on American companies. Of course, this US problem, once resolved, will crush the migration of businesses into Dublin, Zurich, Bermuda, Dubai, etc…especially if they raise their rates.

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