Monday 18 December 2017

'Ignore the muley, pukey economists'

Shane Ross and Nick Webb

THE dramatic decision to slash €15bn off government spending to get the deficit under control by 2014 may save the country or it may ram a stake through its heart.

We asked some of the country's shrewdest business and economics minds whether we're right to stick to the 2014 target and how the country can be turned around.


'IGNORE the muley, pukey economists like Ictu chief David Begg and others of his ilk. We should aim to close the deficit in three years, not five, six or seven. That means targeting a €10bn adjustment figure. This could be done by an immediate bonfire of the quangos. Close them all. Impose 20 per cent compulsory redundancies in the Civil Service and a 10 per cent across-the-board reduction in social welfare.

"On the tax side, increase all taxes by 10 per cent. Leadership needs to come from the front, so abolish the Seanad and reduce the number of TDs to 80. Ministers and state agencies should be banned from taking consultants or advisers on to state books.

"The Government should give an immediate injection to the flagging tourism industry by adopting Ryanair's tourist policy, including abolition of the €10 tourist tax.

"After it sells the semi-states -- including Dublin Airport Authority -- to the highest bidder, it should use the money to pay down the national debt."


'WE should not string out the process to 2016 or later. It is important that we get society and the finances into balance more quickly. It is not just a matter of arithmetic. It is political economy.

"Today people are ready for measures that they would not accept in other circumstances. This political consensus of support will have a limited life. It will not last seven years.

"Remember, global financial markets will lend to other nations. They can lend to the US, which will be borrowing heavily in the coming years, to EU or African countries paying back their debts. As the recession ends, more countries will compete for borrowings. We should act decisively before that happens.

"On the Croke Park deal, the unions' savings and modernisation exercise seems to be taking far too long. There is no sign of delivery.

"Public sector reform must be the centre of our recovery. When I was in office, the departments did not co-operate with the White Paper on reform."

Barry Maloney

'TO be honest, I don't think we've much choice. It's all been run out of Europe. The Government is just doing what it's been told," according to Barry Maloney, who spoke from New York after the €1.6bn flotation of Betfair, in which his venture firm Benchmark is a major investor.

"The bigger issue is what are we doing about stimulating the economy? What are we doing about getting a recovery under way? Where are the jobs initiatives? The thing that drives me nuts is that we just seem to be sitting there doing nothing.

"You'd need people with broad restructuring capabilities, people who have managed national crises before. You'd need an international efficiency and cost-cutting expert who'd cut through all the bureaucracy we've built up, and a jobs czar, someone who would encourage growth and development, and then just get the hell out of their way."

Stan McCarthy

'MY view is that we have to be fiscally conservative," says Stan McCarthy, CEO of Ireland's biggest food company, the €4.6bn Kerry Group.

"There are structural problems in many of our social systems, in terms of a lot of waste, a lot of entitlement. This is an opportunity to address all of that. There's a vibrant economy to be got at."

Getting our national finances under control should be done "sooner rather than later" so the 2014 target should be met. "I think a clear message needs to be given to the population about the consequences if we don't do it.

"We're getting there too slowly in terms of trying to become competitive from a labour perspective. I can only benchmark it against the other countries that Kerry operates in -- and we have some major challenges ahead of us."


'WE must keep to the 2014 date for closing the deficit. We were lucky that Europe even allowed us that latitude. The economy was worse when I took over at Finance in the Eighties. We had 17 per cent unemployment. Today it is 13 per cent. We had a debt-to-GDP ratio of 120 per cent. Today it is 80 per cent.

"Just across the border from Sligo in Enniskillen, the dole is 30 per cent to 40 per cent lower. The dole should be cut, but children and pensioners should be left alone.

"The vulnerable in the health service should be untouched but administrators and consultants (some on €300,000 plus a year) should take the pain. We should bring the unions together in the health area where 70 per cent of spending goes on pay. If no agreement can be reached on pay, numbers must be cut.

"There is still 5 per cent fat lurking, ready for cutting,in every single department. Protect education because it is the key to our future.

"We should boost the tourist industry by abolishing landing charges at all our airports for three years."

Sunday Independent

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