A Budget in Ireland’s Interest
The deal concluded by Fianna Fáil with the EU and the IMF does not serve Ireland’s national interest.
While providing Ireland with necessary funding, the deal transfers even more of the costs of the banking failure onto the shoulders of the Irish taxpayer, to the benefit of bank bondholders. Those who lent money to Irish banks to fuel the property boom are not forced to pay for their mistakes. Instead, Ireland has been offered a line of expensive credit with which to bail them out, and to run the state for the next three years, at punishing rates of interest. In addition, Fianna Fáil have caved in to pressure, and have agreed to €6 billion in budget adjustments in 2011.
Labour does not share the conservative consensus in Ireland, and in the European Commission, that a €6 billion adjustment is the right course of action. Ireland does have an unsustainable budget deficit, and tackling it will require hard decisions, but we have to make the right hard decisions. Imposing a €6 billion adjustment in 2011 poses an unacceptable risk to jobs and growth in Ireland. In a highly uncertain economic environment, this level of adjustment risks further stagnation to the Irish economy in 2011, with worsening human consequences. It is a risk that Ireland should not take.
Labour’s proposals for Budget 2011 demonstrate how budget consolidation can be combined with a strategy for growth and job creation. By making some €5.0 billion in adjustments, and by recycling €500m into job creation, a net adjustment of €4.5 million can be made, while at the same time promoting employment.
Our proposals are based on our core commitment to fairness, which should be an essential element in budgetary strategy. To get through this crisis, we must come together as One Ireland. That means that everyone must contribute, but those who have the most must contribute the most.
Ireland needs reform. Rather than lurching from Budget to Budget, we must change the way we manage the nation’s finances – reforming the way we manage public spending, more effective scrutinising of spending and a set of reform measures to ensure that we never find ourselves in a crisis like this again.
Labour’s budget proposals, based on Jobs, Reform and Fairness, serve the interests of the Irish people – the real national interest.