Séamus Healy (Tipperary South, Workers and Unemployed Action Group) | Oireachtas source

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. In fact, it is counter-productive. 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. This week 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 I suggest to the Minister that it is now clear that these proposals should be withdrawn and Government policy should be to stimulate and grow the economy to ensure the social damage which has already been done is reversed and real jobs are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.

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