Monday 18 December 2017

McCarthy warns of seven more years of suffering

Aideen Sheehan

Aideen Sheehan

IRISH people will have to endure seven austerity Budgets before the economy begins to recover, economist Colm McCarthy said yesterday.

The Government is still spending €5 for every €3 it takes in in revenues, despite the cuts that have already been made, the controversial author of the An Bord Snip report told an Agricultural Science Association conference in Tullow, Co Carlow.

Spending had continued to grow despite the downturn because of higher unemployment supports and the cost of servicing Ireland's debts, he said.

The economic crisis was not a meteorite from outer space that just happened to pick on Ireland, as most of the damage was self-inflicted; Ireland had a history of boom and bust caused by government policy that needed to be addressed to prevent a "third cock-up" in 20 or 30 years, he said.

It would take four or five years to rebuild a viable economy from the crisis, which was even worse than the 1980s one because it had an added banking crisis, Mr McCarthy said.

He added that farming and the manufacturing sectors had suffered over the past decade from the economy becoming uncompetitive, but exports in the traded sector would be crucial to restoring growth.

Mr McCarthy launched a strong attack on Irish society, saying public debate was dominated by lobbyists in the public and private sector.

He called for the Seanad to be got rid of, and reform of local government to remove unnecessary costly layers of public expense.

He slated Metro North as a "ridiculous scheme" for which the Government wouldn't release a cost-benefit analysis because they didn't want it scrutinised.

The Agricultural Science Association conference also heard that pressure on the EU budget was a great threat to Irish farming and could lead to substantial cuts in payments to farmers here.

Huge pressure is building up across Europe for budget cuts which could hit the Common Agricultural Policy, said the head of the European Parliament's influential Agriculture Committee, Scottish MEP George Lyon.

There was also huge demand from new member states for a greater share of the cake when distributing farm payments, he said.

Irish farmers receive more than €300 per hectare on average compared with less than €100 in new eastern European members, which means a move towards equalisation would see Ireland lose out.

Mr Lyon predicted the historic system of paying farmers subsidies based on how much food they produced 10 years ago would end in favour of a new flat payment per hectare.

Irish Independent

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