Thursday 21 February 2019

Pat Rabbitte: Labour TDs who remain in trenches for tough battles ahead deserve credit

Nation's problems won't be solved by Sinn Fein fairytale economics or Fianna Fail rewriting histor

Pat Rabbitte

How quickly we forget. Anyone from outside the country monitoring coverage of the Budget for the past two weeks would be forgiven for not understanding that less than two years ago we were at the edge of chaos. That we are still in a profound economic crisis. That we still have a huge public deficit. That we still rely on the EU and the IMF to lend us money.

Labour TDs and senators, of course, know full well that there is a crisis, because we meet its victims every day – the people in our constituencies who have no work, those burdened down with debt, those whose children are emigrating. This is the worst economic crisis since the Emergency and it has huge implications for our ability to manage our own affairs, now and into the future. But no one has been focusing on this for the past two weeks.

This country was plunged into crisis and we are by no means out of the woods. Labour didn't create the crisis and neither did Fine Gael, but we are the parties with a mandate from the people to deal with it. We knew going into government that it wouldn't be easy. We went in with our eyes open about the scale of the task and about the difficult decisions that would be needed to put things right.

The Labour Party is not a flag of convenience. You cannot walk away when the going gets tough and then seek to return in normal times. The times are not normal. And Labour TDs, who have shown determination and solidarity in the teeth of difficult decisions, deserve commendation.

It is a pity that a Labour TD must walk off the field of battle before praise is heaped on his or her head. The Labour TDs who stay in the trenches while the battle rages are the ones who deserve the praise.

We did not – and neither did Fine Gael – win an overall majority. Both parties realised that a government likely to survive this storm would need to be broadly based. In effect, this is a national government, which has a large majority in the Dail and which represents a wide range of opinion in Irish life. Our problems are too many and too great for them to be solved by a single narrow section of our society.

What that means, however, is that negotiation and compromise are necessary and, in that context, only a fool could believe they were going to get 100 per cent of their way, 100 per cent of the time. What Labour is doing in Government is working to shape a national recovery strategy grounded on our values, so that we do get a recovery and that we get it in a way which is as fair as possible.

Labour has taken a measure of criticism about what happened to some policies we campaigned for – including, I suspect, criticism from some who have never voted for Labour and who never will. After the campaign, we settled on a Programme for Government with Fine Gael which did not include some policies we would dearly like to have included.

Despite the global recession and eurozone instability, we are working our way through that programme. In the process, we have restored Ireland's credibility. Our exports are doing well. The NTMA has been able to go back to the markets and has raised €7bn in the past few months. The ESB and BGE have each sourced a half billion, in circumstances where their bonds were 12 times oversubscribed.

Last year was the best in 10 for foreign direct investment. We have protected basic social welfare rates, restored the minimum wage and taken 330,000 low-paid workers out of the USC net.

In difficult circumstances we persuaded people to endorse the Fiscal Stability Treaty and the Children's Rights Amendment. The Financial Insolvency Bill is now law and the Local Property Tax Bill is currently in the Dail, to conclude by mid-week. This broadening of the tax base is the most significant reform of local government funding in decades. It takes pressure off income tax and off people at work and it brings us into line with other modern democracies.

The big disappointment is still jobs. The restructuring of the public service has seen 32,000 jobs go. The banks have been steadily shedding thousands of jobs. IDA-sponsored jobs have totalled just over 6,000 new jobs this year. We have not achieved the growth rates that were anticipated at the time the Programme for Government was negotiated. Unless the European economy improves, our growth rates will be less than we need.

The Live Register is 12,290 lower than in November 2011. But, at 14.6 per cent, the seasonally adjusted rate is still unconscionably high. This is the big challenge confronting Government.

What a pity then that we can't avoid providing the media with mini internal dramas that are the stuff of fleeting headlines.

Because what is most important is to maintain focus on is our over-riding promise – economic recovery. Labour is not a single issue party. Yes, we do work to protect the poorest in our society but, as our name suggests, Labour is also the party of work and of working people. The Irish economy is not a block grant. We have to create wealth before we can distribute it. We have to rebuild an economy that creates jobs and improves incomes. These are, and always have been, core Labour values.

But we can't do any of this unless we can return to managing our public finances in a sensible and orderly way. Not only does the Government need to be able to borrow money, from people willing to lend to us because they know they will get their money back, but so too do all the companies that create jobs in Ireland. We cannot survive as an economy unless we are credit-worthy and that means reducing our deficit from where it is now to a sustainable level.

It may be that, in theory, you could construct a budget where each individual measure was fair, where the overall package was fair, where the multi-annual impact was fair, and where you still achieved the largest correction to public finances of any state in modern history. And you could then get a man in a red suit and some elves to deliver it. In reality, however, this is very difficult stuff, which regrettably involves very real difficulties for people to whom no blame whatsoever attaches. No amount of fairy-tale economics from Sinn Fein, or re-writing of history from Fianna Fail, will change that basic fact.

Everyone has to contribute to the solution. I wish it were not so, but it is. What we can be proud of is that as a country we have managed, on balance, to make the adjustment in a fair manner. True, the Budget did not contain an increase in USC for incomes over €100,000, but it did contain a package that yields seven times more in taxes from the wealthiest sections of our society.

Labour's over-riding promise, at the last election and today, is to put the national interest first by building economic recovery and being able to say goodbye to the troika. As Eamon Gilmore reminded us last week, Article 1 of the Irish Constitution states that "The Irish Nation hereby affirms its inalienable, indefeasible, and sovereign right to choose its own form of Government, to determine its relations with other nations, and to develop its life, political, economic and cultural, in accordance with its own genius and traditions". Last week, the Labour Parliamentary Party, including many bright and able young public representatives, was tested in its loyalty to that claim. Far from being disappointed by the loss of one, I am heartened by the resolve of those who stayed the course.

Pat Rabbitte TD is Minister for Communications, Energy and Natural Resources.

Sunday Independent

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