Mick Wallace (Wexford, Independent) | Oireachtas source

Given that this Bill forms part of the Government's stated objective of reducing the public sector pay and pensions bill by an additional €1 billion by 2015, I will draw on some research carried out by the Nevin Economic Research Institute, which questions the validity of the subjective. Tom Healy and Rory O'Farrell of the institute have calculated that the actual savings to the Government of a €1 billion cut to the public sector payroll is likely to be no more than €250 million. They also have found this measure will cost between 5,000 and 10,000 jobs, approximately half of which will be in the public sector. According to Tom Healy, this is because most of the savings on the Government spending side are lost either directly through income tax, universal social contribution and other State deductions or through falling retail sale taxes and loss of jobs in the private sector.

I was interested to hear the earlier contribution of the Minister, Deputy Howlin, and was somewhat taken aback by his comment that he regards the Government's fiscal consolidation policy to be growth-friendly and as equitable as possible and that it has shown results in recent years. This is quite a claim, given the domestic economy is on its knees and four to five businesses are going out of business each day. Furthermore, the deprivation rate, which measures those experiencing two or more types of deprivation, more than doubled from a low of 11.8% in 2007 to 24.5% in 2011. On average, 38% of all households spend more than their disposable incomes and households with the lowest incomes are most likely to have expenditure that exceeds their income. Almost two thirds or 63% of those in the lowest income category have higher expenditure than income. The autism unit in Scoil Mhuire, Wexford had a 57% success rate for full-time integration of children from the autism spectrum disorder, ASD, unit into mainstream classes. Since the imposition of the cuts two years ago in which six positions were axed, this success rate has been reduced to zero. The Minister should tell me what part of this is growth-friendly and equitable because I cannot discern it.

In an article published in The Irish Times a fortnight ago, Tom Healy commented on the Government's austerity agenda. He stated:

If “savings” actually equal “cuts” then Ireland might be running a government surplus. Instead, after €28 billion of fiscal “effort” the underlying government deficit (excluding bank bailouts and bank levies paid to government) has fallen from 11.5 per cent to just 8.6 per cent in four years. There has been a huge degree of pain for relatively little gain.

Mr. Healy argued that the alternative to this approach is to minimise further harm by focusing the fiscal consolidation on job creation, income distribution and maintenance of priority public services, all of which have been undermined as a result of five consecutive years of austerity budgets.

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