Paul Murphy (Dublin South West, RISE) | Oireachtas source

Reference was made to an overlap with or mapping onto phase 3 of IFAC's plan. The programme for government, regarding that period, refers to utilising taxation and expenditure measures to close the deficit, while IFAC refers to phase 3 being a period of fiscal consolidation to bring the debt-to-GNI* ratio down. It seems to me that IFAC is at pains to avoid describing this as a period of austerity, but I would like to explore that further because on the figures here, unfortunately, it does not seem to me that there are many other conclusions available.

The point was made that the adjustment would be significantly less than that implemented after the 2008 crisis. That is based, however, on looking at the figures over seven years after 2008, versus three years from 2023 to 2025. If we look at the figures on a year-on-year basis, and the potential for a €14 billion adjustment between 2023 and 2025, that works out as a higher amount of fiscal consolidation - in layman's terms, austerity - than we had post the 2008 crisis.

The opening statement from IFAC goes on to state: "This does not mean a return to severe austerity." We can debate the adjective later. The statement continues: "We do not expect austerity in the sense of significant increases in unemployment due to severe fiscal adjustments taking place in a downturn." IFAC is stating that is not austerity, but then redefines austerity as something that nobody defines it as. Austerity, as defined by most people, refers to economic measures to close deficits based on increasing taxation or decreasing public expenditure. That is really what IFAC foresees happening in phase 3 from 2023 to 2025, and, on a year-by-year basis, IFAC sees that process coming in at around a similar amount to the kind of year-by-year austerity we saw from 2008 onwards.