Tuesday 21 November 2017

Wealthy 'bore the brunt of austerity'

Fionnan Sheahan and Louise Hogan

THE wealthy took the biggest hit from austerity measures imposed under the bailout, a leading member of the troika has claimed.

In comments which will upset hard-working families, the European Commission's top official working on Ireland's bailout said the better-off sections of society paid a heavier price than the poor.

Istvan Szekely said the impact of the adjustment was progressive, meaning those on higher incomes took a greater share of the austerity.

His statement came as influential think-tank the OECD warned Ireland will miss EU targets to slash the budget deficit to 3pc by 2015.

It also said the Government was not doing enough to get unemployed people back to work.

Mr Szekely, a regular visitor to Ireland over the three years of the bailout, maintained the wealthiest paid most in the tax hikes and spending cuts.

"So indeed, those who were better off actually bore a larger share of the hit," he said.

The official based his conclusions on an analysis of the budgets from 2009 to 2013.

Mr Szekely also said the Government decided what measures to implement to reach the deficit-reduction targets.

He said that within the framework of the bailout programme it was "always up to the Irish authorities to choose the combination of measures" they felt best supported their economic and social goals.

He said the growth outlook for Ireland's economy remained "important for the success of the economic adjustment programme".

But Mr Szekely was contradicted by the lobby group, Social Justice Ireland (SJI), which warned those close to or below the poverty line had in fact been "pushed over the edge" by the drive towards austerity.

SJI director Fr Sean Healy rejected the comments from Mr Szekely and said "austerity" was the wrong option for Ireland in the first place.

He said those who were well-off had "plenty of capacity" to take the hit, whereas those "already below the poverty line or close to it" and who lost their jobs had no cushion to fall back on.

"There were an accumulative series of hits coming at them and they were pushed over the edge," he said.

Fr Healy said many sectors had lost dramatically through high mortgages and unemployment and took "extraordinary levels of hits".

"When you take the whole story, poor- to middle-income Ireland has taken huge hits . . . the better off had far more capacity to take the hits, and for the most part were able to take the hits that came their way and still not be seriously damaged," he said.

INEQUALITY

The campaigner felt senior European officials were failing to take into account that there was already "large inequality" in Ireland prior to the 2008 crisis.

Department of Public Expenditure secretary general Robert Watt said the Government had protected the delivery of services during the bailout.

"Obviously outside social welfare, health and education, there has been dramatic reduction in nearly everything else that the Government does," he said.

Mr Watt said public service pay had been reduced from a peak of €17.5bn in 2009 to €14.5bn in 2014, with numbers working in the sector reduced by 30,000 to 290,000 by 2014.

Irish Independent

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