It is true that the reports from the IMF and the OECD are neither a ringing endorsement of the Government’s stewardship nor handy crib sheets for the Opposition to attack the Government. But the problem is that when the reports were published, particularly the IMF report, they were accompanied by the sort of press releases the Government issues at such times suggesting that they constitute a ringing endorsement of Government policy.
That was exactly what we got when the IMF report was published. In the Minister of State’s speech in the Seanad, he welcomed the opportunity to have this debate because it gives an opportunity to put on record the endorsement of the Government’s policies and the endorsement it provides for the action it is taking. It includes some endorsements of what the Government is doing but the extent to which we should fall to our knees and thank the Government for taking action in this unprecedented crisis is another matter. The Government is not entitled to come into this House and seek congratulations for doing the job it is paid by the people to do, for taking steps to turn around this crisis that is partly of their making.
I am adhering to the call for restraint in this debate by saying the crisis was only partly of the Government’s making but it was of its making to a considerable extent. This was pointed out in the IMF report, which the government is so quick to characterise as an endorsement of the Government’s position. The Minister asked that while we debate the IMF report, we refer to it, and I propose to do so. I do not intend to paraphrase the report at all but will quote directly from it lest I am accused, as others have been and as some have done, of spinning it.
I will talk about the future, because that is what we are all interested in, but we cannot look to the future unless we are honest about how we got to where we are. Senator MacSharry is a good colleague in this House who often uses the phrase: “We are where we are.” That covers a multitude. It is easy for a Minister or someone else to say it, but how did we get to where we are? This is part of the analysis required to see how we get away from where we are. In addition, it is not a matter of where we are in the sense of spreading the blame; it is about where the Government has brought us. We must reword that handy little catch-all phrase which is used mainly by Government spokespersons and apologists in an effort to dissuade us from considering how we got to the state we are in.
The IMF report states:
Dazzling growth and buoyant public revenues prompted tax reductions and expansion of public expenditures that have proved unsustainable. Various commentators and the IMF in its Article IV consultations did warn that the seemingly-unstoppable growth masked serious imbalances, including the fragility of public finances.
This is a direct quote and not an attempt to paraphrase or put a spin on anything. The report states that the IMF analysis “shows that after strong growth between 1987 and 2001, which earned Ireland the moniker of the ’Celtic Tiger,’ potential growth had steadily eroded”. Here, the IMF is telling the Government that growth had started to erode from 2001. This is the report the Government is so anxious to tell us constitutes an endorsement of its policies. The report goes on to state: “Analysis by OECD staff, consistent with the results from the Kalman-filtering approach, concludes that Ireland was perhaps the most overheated of all advanced economies.” I will not burden people with the detail of the Kalman filtering approach which is an econometric model. Again, these are the words of the IMF report itself.