independent

Tuesday 29 July 2014

The country can't afford another budget like last year's

Published 31/10/2012|09:58

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DEPUTY STEPHEN DONNELLY is under no illusion - Irish middle level and low income earners can't afford another budget like last year.

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The Independent TD maintains that those with less income coming into their homes had a greater onus placed on them to cover of Ireland's debt than those with larger incomes.

'The regressive nature of last year's budget can't be allowed to happen again. Examination of last year's budget by the E.S.R.I (Economic and Social Research Institute) show that there is a direct correlation between household income and how much pain a household was required to take. Unfortunately the less money you had, the more this Government asked of you to carry the burden. That is independently verified by the E.S.R.I..'

During the summer Deputy Donnelly analysed the cost per person of the bank bailouts in Europe and found that Ireland had paid several time more than anyone else, without any sign of the country having secured much in return.

Having recently met the Troika last week, he believes they would be open to a longer programme.

'It was a very interesting meeting. From their point of view the Government's programme, which is predicted on economic growth, may need tweaking to reflect changing economic conditions. In short, they're not sure Plan A is working and they are open to a plan B.

'I was delighted to hear they were aware of the difficulties that the current approach to fiscal consolidation is causing. They felt that the growth projections for the country are broadly right but this year's growth would be lower than expected. In response, I've called on the government to finally come up with policies that put citizens ahead of bankers' balance sheets and conclusively address the household debt problem.'

He also discussed the issue of bondholder payments with the Troika representatives, and it was pointed out to him that the previous Government, and not the Troika, insisted on payments to unguaranteed bondholders.

Deputy Donnelly adds, 'Troika were conscious that the cost of living in Ireland was too high, stressed the need for internal devaluation, and stated that the implementation of solutions to the mortgage crisis has been too slow in coming.

'They also said there were opportunities for substantial reductions in public sector spending that wouldn't result in service provision cuts. In particular they referenced a threefold increase in health spending during the boom years, without a corresponding increase in service provision.'

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