Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

The Irish Fiscal Advisory Council might have written a different pre-budget statement about the capacity of people to bear even more austerity because of the crisis memory, as referred to by Deputy Paul Murphy, had it been written following the demonstration last Saturday week. It got that very wrong. What the demonstration showed is that people have had enough and they are not willing to take any more.

I apologise to the Minister for not being present for his speech. The reason I was late is because I was attending a meeting to organise the next big demonstration which will take place on 1 November. He will see that last Saturday week was not a one-off event but is part of a growing and sustained revolt throughout the country with people saying they have had it and they are drawing a line with water charges or any attempt to make them pay any more for the crimes of others such as bankers and bondholders. The Irish Fiscal Advisory Council has got it very wrong on that front.

I have no problem with the concept of independent monitoring or overview of Government economic policy in terms of ensuring policies are not pursued which would create instability or crisis. I would equally say democratically elected Governments and, more important, the people who elect them must ultimately have the freedom to make their own decisions. I do not have a problem with the Minister, Deputy Noonan, saying he does not agree with the Irish Fiscal Advisory Council and the Government will do things in its own way because, ultimately, such decisions must be made by the people. The problem I have is that this so-called independent group has been set up by the troika and its main task has been to ensure ordinary people pay the price for a banking and financial crisis that was not created by them but was created by the financial institutions, the big political institutions in Europe and the political establishment in this country. Its main job has been to ensure ordinary people pay the price for that. That has been a terrible price. The choices we are offered are between the Irish Fiscal Advisory Council saying we have to continue down this road and take a further €2 billion out of the economy, thus inflicting even more suffering on ordinary people, or the Government’s claim that we do not have to do it because its policies are such a fantastic success that it is not necessary to do so, that we are out of the woods now due to its policies which charted the way forward, and that perhaps the Irish Fiscal Advisory Council did not fully understand just how fantastically successful the Government’s policies have been, which is the reason it is not necessary to make a further cut of €2 billion.

Both of those options are false, but there are aspects of truth in both. I agree with the Irish Fiscal Advisory Council's statement that the downside risks in terms of the European economy are such that we must be careful about the rather spectacular growth projections that are emerging. The IFAC has a good point to make about there being a serious danger involved in that regard. I worry a lot about the Government’s current triumphalism in terms of the projected growth it states will alleviate the debt burden, solve the deficit problems, and chart us on the way back to economic recovery and out of a boom and slump cycle. I do not see that at all. There is a problem with both the way the Government and the Fiscal Advisory Council look at the situation in that they have not identified what it is that produces the boom and bust cycle in the first place. The analysis of both parties has failed to address that fundamental question.

As Deputy Paul Murphy indicated, there is a significant element of trying to rewrite what happened. The Government’s narrative, which it shares with IFAC, is that the problem was we were spending way beyond our means and therefore it was all about reining in public spending to avoid the boom and bust cycle. I put it to the Minister that is not what caused the crisis. I am amazed the Minister does not understand that and I am shocked beyond belief that IFAC, as a body of economic experts, does not understand it. Of course one needs a balanced budget and a link between expenditure and revenue, but the claim that such was the problem is simply not true. Our debt was manageable until the crash came. Our expenditure was not vastly outstripping revenue but what was a problem was the type of growth we had. At various times the Minister acknowledged the point, although even when he was in opposition he did not do much about it. Very few people - really only the left - called for a stop to what was happening and said the focus and disproportionate emphasis on the property sector was dangerous and was an accident waiting to happen that could result in an economic crash. That was the problem that led to the crash, which was facilitated by bankers, rather than us spending more than we were getting in revenue.

I am worried about precisely the same thing now. There does not seem to be any real analysis either from the Government or IFAC about the type of growth that is necessary if we want to get out of the boom and bust cycle. Could the Minister clarify whether our plans for economic growth are based on sustainable models where one takes into account what we produce, for whom, and whether it is about meeting the needs of people and society or if it is just about growth numbers and balance sheets? That is the fundamental problem with the approach of both the Minister and IFAC. We need a different model that starts with what society needs, what people need and plans to meet those needs rather than the market model which is just about rampant, naked competition which is what produces the boom and bust cycle the Minister says he wants to get away from.

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