Govt policy causing longterm damage says Healy

It is now clear that Government policy, including the public sector pay cuts, is causing long term social damage and involves huge degrees of pain with relatively little gain, South Tipperary Independent Deputy Seamus Healy told the Dáil.

It is now clear that Government policy, including the public sector pay cuts, is causing long term social damage and involves huge degrees of pain with relatively little gain, South Tipperary Independent Deputy Seamus Healy told the Dáil.

Oireachtas Correspondent

Questions still remain over Justice Minister - McGrath

Questions still remain concerning whether Justice Minister Alan Shatter was cordial when stopped by a garda and if he was treated the same as anybody else, Tipperary Independent Deputy Mattie McGrath told the Dáil.

Supporting a Fianna Fáil motion of ‘No Confidence’ in the Minister, he asked if he was cautioned and if he attempted to use Dáil privilege. “His convoluted answer that took five and a half hours and his ten-page speech - one page of which referred to the facts - did not answer the questions,” he said. “The Minister fudged the question about whether he used constitutional privilege. He needs to be explicit on that. In his capacity as Minister, he can ask the Garda Commissioner to ascertain directly from the gardaí on duty what exactly occurred. Until he does this, he must realise that by implication he is accusing the gardaí of lies. I do not say that lightly. The Minister’s behaviour has been outrageous.”

Deputy McGrath said the Minister treated the people of South Tipperary with disdain, as he treats most people. “The Minister has questions to answer but he has not answered them,” he said. “I believe that in the fullness of time the truth will come out. The Minister knows what he did. Maybe his passenger on the night could clarify what happened, if he cannot.”

The Fianna Fáil motion was defeated by 88 votes to 45.

Government policy causing longterm social damage - Healy

It is now clear that Government policy, including the public sector pay cuts, is causing long term social damage and involves huge degrees of pain with relatively little gain, South Tipperary Independent Deputy Seamus Healy told the Dáil.

In fact, it is counter-productive, he said. The Nevin Economic Research Institute professional review has shown that cuts of €1 billion would have a net gain to the Exchequer of €250 million. That is because there would be a reduced income tax and universal social charge take, reduced retail sales tax, VAT and excise duty, increased social welfare payments and, crucially, anything up to 10,000 job losses, 5,000 of would be in the private sector.

“This is a view which is generally supported by other economists,” he said. “Professor Ray Kinsella of the UCD postgraduate school of business studies also said this sort of adjustment is tantamount to self harm. I suggest to the Minister that it is now clear that these proposals should be withdrawn and Government policy should be to stimulate and grow the economy to ensure the social damage which has already been done is reversed and real jobs are created.”

In reply the Minister for Public Expenditure and Reform Brendan Howlin said the Government was faced with an economic meltdown when it came into office.

“We could not pay beyond five months for services - that is how much money was in the kitty - unless we got an external funder to give us money,” he said. “The only people who gave us money were the troika, and they gave it with conditions. The idea that one can stop austerity, as if one can walk away and money will flutter down from the sky, is not accurate. We need to work towards a balanced budget. Our income as a State fell by 30% because the previous Government built an artificial model where income was predicated on construction and outgoings were expanded exponentially for the years it was in office. That had to be brought into balance. Anybody who examines the fiscal situation understands that.”

Of course he said there are implications for taking money out of the economy. That is why the Government had done things in such a measured way.

“We first extended the consolidation period to get to 3% by a year, from 2014 to 2015. We have hit the targets. The Deputy is quite wrong to say there are no obvious benefits. We have stabilised the economy and are one of the few economies in Europe to grow. The ESRI indicated that the economy will grow this year and next. We are the most attractive country in Europe for inward investment and are creating jobs. All of this is extremely difficult and I wish to God we were not forced to have to do it, but there is no simple alternative which allows us simply to continue paying because we will run out of money in very short order. Nobody will give us money at an affordable rate.”