‘Bailouts must not become blackmail’
Sir, – When reading Fintan O’Toole on economics, the most appropriate response is an eye-roll. His piece on Saturday about business bailouts, however, presents the real risk that readers will think he knows what he’s talking about (“Governments need to resist corporate blackmail over bailouts”, Opinion & Analysis, May 2nd).
First, his article is fixated on large, multinational, or tax-dodging entities, which he worries will “blackmail” Government into support. Fewer than 1,000 of Ireland’s 271,000 businesses are large. That’s less than half of one per cent. Good luck with the blackmail.
Second, he rehashes the tired “we bailed out the banks” trope. Indeed we did, and taxpayers (and our children) were unjustifiably saddled with that debt.
But the bigger bailout was that of the public sector. Fully €105 billion of our national debt was pumped into keeping a largely unreformed sector in the style to which it has become accustomed.
He ignores it because acknowledgment would offend faux-left sensibilities.
Now our small and medium-sized enterprises (SMEs) are faced with an external, existential threat, not of their making. And your columnist suggests “businesses that get public money have to be worth saving”. Would he extend that maxim to every euro and every arm of State spending? Unlikely.
More than half Ireland’s PAYE, USC and PRSI yield comes from SMEs. €62 in every €100 of citizens’ income earned in the State comes from an SME. Some 63 per cent of our VAT is derived from the sector.
He says business cannot survive if societies are falling apart. But how does Fintan O’Toole propose the maintenance of our society in the absence of the small business sector that holds the exchequer up?
Small business owners are heroic. They need, and are entitled, to State help. – Yours, etc,
Chief Executive, ISME,