Things not nearly as bad as they are often portrayed

Inside Politics: We enjoy living standards that were unimaginable to previous generations

Minister for Finance Michael Noonan: his plan to ensure that budgetary discipline continues until 2020 has provoked a predictable clamour from “anti-austerity” campaigners. Photograph: Gareth Chaney/Collins

Minister for Finance Michael Noonan: his plan to ensure that budgetary discipline continues until 2020 has provoked a predictable clamour from “anti-austerity” campaigners. Photograph: Gareth Chaney/Collins


Michael Noonan’s plan to put structures in place to ensure that budgetary discipline continues until 2020 has provoked a predictable clamour from “anti-austerity” campaigners.

Some politicians and pundits have learned nothing from the past decade and appear to believe that, despite our massive debt burden, the exchequer can return to lavish spending without regard to the consequences.

There is also the question about just how austere our “austerity” actually is.

Some, particularly those who have lost their jobs or have ended up in serious debt, have undoubtedly suffered significantly during the current downturn but for most people the adjustment has not been nearly as painful.

The fact that over 90 per cent of home owners have signed up to pay their property tax obligations is hardly a sign of a society buckling under the stress of “austerity”. On the contrary, it reflects the fact that most people are still doing remarkably well by historical standards.

We enjoy living standards that were unimaginable to previous generations and according to a range of international yardsticks, we are one of the most prosperous and fairest countries on the planet.

That is not something “anti-austerity” campaigners or the media purveyors of doom want to hear but it is worth looking at some of the evidence.

One very important international measurement of a country’s wellbeing and economic health is the United Nations Human Development Index. This ranks countries on factors including income, education, health and life expectancy.

Seventh best
The report for 2012 published a few months ago ranked Ireland seventh best off out of 186 UN states. It didn’t generate a lot of publicity here, probably because it runs counter to the dominant media narrative of a country in the depths of depression.

Ireland had slipped two places since 2008 but coming in seventh overall and the third highest in the EU is remarkable given the scale of the current economic adjustment. The UK was in 26th place, and we were also ahead of some long-term rich countries like Sweden, Switzerland, Japan and Canada.

When the index was first published in 1990 the UK was in 10th position and Ireland was in 17th. We have come a considerable way since then and the financial crash has not destroyed most of the gains made in the interval.

The UN index is not the only international measurement that puts Ireland in the top tier. Average wage statistics from the OECD put Ireland second only to the United States in terms of gross incomes, while the World Economic Forum global gender gap index puts Ireland in fifth place last year, up from tenth in 2006.

A range of reports from the OECD, the European Commission and the ESRI have shown that we have one of the fairest income tax and income redistribution systems in the world. It means that those earning the most have borne the greatest share of the fiscal adjustment since 2009.

Of course statistics and surveys don’t tell the full story about the impact of the crash. Still, they do bear out what many outside the hothouse of the political and media worlds know in their bones: for most people things are not nearly as bad as they are often portrayed.

In a recent paper eminent economist Brendan Walsh explored how Ireland had fared on a range of indicators for wellbeing from the 1970s to 2011. One of his conclusions based on Eurobaromoter polls was that life satisfaction had not shown a marked decline between 2007 and 2011, despite the fact that this country has been among the hardest hit by the financial crisis. While there was a small decline it was not as dramatic as that recorded in other crisis-stricken countries or during previous Irish recessions.

“Furthermore, contrary to expectations, other possible indicators of wellbeing, such as the suicide rate and admission rates to psychiatric hospitals, have not risen in line with the soaring unemployment rate, and the Irish fertility rate has remained high in the face of economic adversity. Overall, the impact of the current recession on wellbeing has been surprisingly small,” concluded Walsh.

His conclusions tally with those of one experienced betting man who wagered a substantial sum on Fianna Fáil to win the Meath East byelection. His logic appeared impeccable. In the last 30 years the government of the day has lost every bylection bar one. So this Government, two years into a tough programme of retrenchment, should have had no chance of winning. In the event Fine Gael candidate Helen McEntee won the contest . This was widely attributed to the sad circumstances that created the vacancy but the punter drew a different conclusion. “People can’t be as angry as the media led me to believe. I should have known that because personally I am prepared to put up with whatever needs to be done to get the country back.”

Big mistakes
The wide acceptance of the need for fiscal discipline doesn’t mean big mistakes have not been made in response to the crisis. One of the outstanding failures is the way the burden of the crash has been heaped on to the shoulders of the young. Tens of thousands of young people have not been able to get jobs or have been forced to emigrate because the pain has not been shared equally across the generations. A recent study by the ESRI established that those aged under 45 have been affected dramatically more by the recession.

The last government and the current one have protected the elderly and punished the young. Putting the economy back on a sustainable path is the best way of catering for the young in the long term but more imaginative short-term policies are also badly needed if Ireland is to retain its standing as one of the best places in the world in which to live.

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