Dial D-A-I-L for economic carnage
“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?