End austerity now - Burton and Gilmore in serious rift
'I was attacked and vilified in a ferocious manner,' says John Whelan
Social Protection Minister Joan Burton, in a significant speech that has placed her at odds with government policy, has said that she believes the country has now reached the limits of austerity.
In an address to a conference of the St Vincent de Paul Society in Dublin yesterday, which was attended by President Michael D Higgins, Ms Burton said that "electorates" in advanced societies had a limit beyond which they were not prepared to accept austerity.
The Labour Party minister added: "I believe that we have reached the limits of austerity now."
Her speech clearly contrasts with stated government policy to continue implementing austerity measures as laid down by the EU/ECB/IMF Troika.
Last night, a spokesman for the Taoiseach said he would not offer any response to Ms Burton's speech.
But in the Sunday Independent today Brian Hayes, the Fine Gael minister of state, writes: "The simple truth is that the savings in the public pay bill cannot be achieved unless pay reductions across the board are put in place."
Ms Burton's speech will also be noted with interest and suspicion within an increasingly factional Labour Party, riven with tensions between a former Workers' Party element and those with traditional Labour values, and is bound to fuel speculation about the leadership of Eamon Gilmore.
Last night a spokesperson for Mr Gilmore said the "objective" of Labour was to end austerity and create employment through the mechanism of a European strategy.
Mr Gilmore's latest stated position clearly indicates a looming rift with Ms Burton and the call for an immediate end to austerity.
The Labour leadership's apparent lack of urgency to end austerity now gave rise to a highly charged meeting of the Labour parliamentary party last week.
At that meeting, Senator John Whelan was singled out by those close to the leadership for criticism of his outspoken analysis of the impact of austerity.
Following Ms Burton's intervention yesterday, Senator Whelan told the Sunday Independent it was "ironic" that he should have been "vilified and attacked in a ferocious manner" for expressing views similar to those of the Social Protection Minister.
He added: "It is gratifying that those sentiments are mirrored or reflected by the highest officeholder in the land, President Michael D Higgins, who was one of the people to inspire me to get involved in politics and the Labour Party in particular."
Also at the St Vincent de Paul 200th anniversary conference yesterday, President Higgins elaborated on the theme he addressed in a well-received speech to the European Parliament last week.
He spoke of "people who are facing barriers in entering employment, supporting their family, completing their education, putting a safe and secure roof over their heads".
President Higgins reminded the conference that there are over 14 per cent of our labour force unemployed, 700,000 people in poverty and an estimated 5,000 homeless.
He said: "In addition, many families are struggling with high levels of debt and mortgage arrears, and on a daily basis they struggle with worry about the security of their home."
Ms Burton's comments will also be a source of unhappiness to Coalition partners Fine Gael, who will not be pleased to see a Labour minister move to sketch out a position on austerity that contrasts with government policy.
But her strong critique will also be seized upon by a growing element within Labour which has been severely critical of the party leadership's emphasis on continued austerity.
Ms Burton also said that all of the Government's policy responses will be set at naught unless "we can move to a position where the target of close to full employment becomes the overarching objective of economic policy".
She said there still appeared to be an "inexplicable preference" for "loading" the costs of the banking crisis on the shoulders of ordinary people and small business.
"The truth is that ordinary people everywhere have shouldered too much of the burden," she said.
She added that, longer term, the ECB should, like the US Federal Reserve, pursue a dual strategy of price stability and growth. "In particular it needs to have an employment target that is as close to full employment as possible," she said.
However, she said the obligations of the State must also be balanced by the responsibilities of citizens. "Behind the startling numbers on jobless households lies a terrible tragedy of wasted potential, lost hope and the diminution of life opportunities."
She added: "The Labour Party should always be first and foremost about work."
President Higgins, meanwhile, said: "We do now need a new connection between economy, society and the person, one based on ethics."
He said the full emergence of these values would require ongoing debate about the relationship between society and the economy and a "definition of the social and cultural spaces as being wider than the economic space".
Last night Senator Whelan told the Sunday Independent, "I'm a little bit at a loss to understand and disappointed at the personalised nature of the attacks on me from some – and I stress some – within the Labour parliamentary party meeting.
"I didn't and don't want to get drawn into an unseemly public row which is really a red herring and a sideshow to the real problem – the issues that are troubling people and families I represent.
"It is a bit ironic that I should be vilified and attacked in a ferocious manner in my absence – because I was there for an hour-and-a-half and nobody said anything to my face – for the issues I have been highlighting and raising for months, if not years, which is the impact of the policies of austerity on ordinary people and families.
"It is gratifying that those sentiments are reflected by the holder of the highest office in the land, President Michael D Higgins. Now I am given to understand that the Minister for Social Protection Joan Burton has said something similar, that austerity must end, a view I welcome and wholly endorse.
"This is something I have been saying for some time now, as far back as 2009 when I lost my job and was kindly offered an opportunity by the Sunday Independent to write about my experiences as an unemployed man, husband, father, son.
"In fact, truth be told, that was why the Labour Party approached me and asked me to stand as a candidate in the general election and the election to Seanad Eireann.
"I am disappointed by the attacks on me now for saying what I have always said, what I was invited into the Labour Party to say, that austerity is taking an awful toll on the people.
"Anything I've said in the Sunday Independent, I've also said directly to Eamon Gilmore and the other relevant ministers in Labour. I think it's time people stick to the issues instead of looking to shoot the messenger."
Austerity just not working – Burton
On the contribution of President Michael D Higgins, she said: "It was a really interesting and positive contribution to a debate that is just starting and needs to start in Ireland and Europe. Given the difficulties tens of millions of Europeans face, if you look at countries with 50 per cent unemployment [and] our own situation, this is not what the founding fathers of Europe envisaged.
"For the Labour Party and the government, we need to focus on how do we get citizens back to work, how do we make societies work to the point where the vast majority of people have access to work, to a social life."
"The people who founded Europe envisaged a Europe where most people had work. The current austerity model is not facilitating this.''
Speaking about austerity, Minister Burton added: "Deflation and austerity have not taken into account the impact on people these policies have.
"Ireland needs to talk about austerity. If a model gives you answers that in practice don't work out, it would be foolish not to look at it and ask is it right for our current circumstances. As J M Keynes famously said, 'when the facts change, I change too.'''
Talking about balancing the books, she said: "As a country we face a brutal situation. We have to create a situation where the deflationary impact of trying to get back into the bond market is not excessive.
"The difficulty for this government and the difficulty for me as Minister for Social Protection is we inherited a deal with the Troika based on growth forecasts in December 2010 that were too optimistic. The Department of Finance sums from that time have not worked out to be correct.
"The IMF staff papers have been consistently saying since that the impact of deflation has been underestimated.''
The minister also noted that the belief that austerity would work had been based on "a flawed spreadsheet that has subsequently been proven to be incorrect. There were fundamental errors in the analysis."