Guest Post: This is not a recovery plan – it is a destruction plan.


Darth Vader and saber

I'm from the IMF, and I'm here to help

This four-year plan from a two-month government is farcical and a complete distraction. Our structural deficit can be dealt with – not in the way this plan suggests, but through the measures that we set out in our pre-budget submission. The real issue is that we are about to embark on an insane course of borrowing to fund a failed banking policy. We cannot afford this banking policy, we cannot afford this loan. Most importantly we cannot afford this government. We need real negotiators in there now to deal with the banks and burn the bondholders – not a red cent more should go into Irish banks until their debts are restructured. If we proceed with this banking plan this four year plan will be bin lining in a matter of weeks.

Even solely dealing with our structural deficit, this government’s plan is in the main a list of deflationary actions that will deepen and lengthen the recession. The impact of these measures will contract the economy – and not one extra tax cent or one public spending cut will be used to reduce the deficit – it will all end up servicing the debt being incurred for the banks.

This is not a recovery plan – it is a destruction plan.

Flaws:

  • Increasing VAT will not grow the economy down here, it will see people flooding across the border and kill southern businesses.
  • Reducing the minimum wage and social welfare will reduce disposable income. It is not only immoral it is economic insanity. Yes, reform of social welfare is needed in terms of tackling fraud, but more importantly we need to get people into jobs and that will lessen the social welfare bill.
  • Reducing the tax band to 15,000 will ensure that everybody earning over 300 per week pays tax. But they are not increasing the top tax rate.
  • Local government services charge: This is additional stealth charges on households that will be hit by water charges and property charges.
  • Public service reform – sacking almost 25,000 public workers is not reforming the public service – it is a knee jerk reaction to save money. A full reform will examine efficiencies and could well result in job losses in some sectors but increases in others like teachers, nurses and guards. It will require careful thought, not an arbitrary announcement of numbers.
  • Increasing student charges from 1,500 to 2,000 will exclude thousands of students from colleges – parents will be faced with choices of ‘do we pay our mortgage or do we send our children to college?’
  • The projected growth of 2.75% on the back of depressing the economy is delusional. This government is delusional.
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