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Seanad
‹ Order of Business

Austerity and economic policy

Summary

Senator Mooney seeks ministerial attendance and a debate on whether austerity works, warning that taxes, charges and further spending reductions are removing billions from the economy.

Without reopening the debate, some of us on this side of the House agree with Senator Fidelma Healy Eames's comments. Our query relates to how Senator Ivana Bacik seemed not to separate her role as a Senator from that of her role as Deputy Leader. No one on this side of the House had an opportunity to respond to her position.

When is it intended for the Minister for Finance or the Minister of State at the Department of Finance, Deputy Brian Hayes, to appear before the House? In the past week there has been a flurry of activity primarily in the international media, to some extent reflected in the national media, arising from a paper published by two economists in America that is now seen to be flawed. Their premise was that high debt led to low growth, but this is being challenged. Commentary has culminated in reports in today's Irish Independent of remarks by European Commission President Barroso to the effect that austerity is not working.

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David P.B. Norris Senator David Norris Independent

We wake up at last.

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Is there an opportunity for the House to debate the question of whether austerity works? It is becoming increasingly obvious to everyone that it does not work. The last budget was the tipping point for the majority of taxpayers. With water charges and the property tax coming down the line, a further €2 billion or €2.5 billion remaining to be taken out of the economy, although on which no decision has been made, and taking into account the €300 million in savings that would have been made following the passage of Croke Park II, up to €3 billion will be removed from the economy. People will say that enough is enough and will not be able to take any more. Therefore, it is incumbent on the Government to determine how to introduce a comprehensive stimulus package that would make a serious dent in the unemployment figures.

There are two examples of such an initiative working. First, the reduction in VAT to 9% stimulated the hotel and restaurant industries, resulting in the creation of some 5,000 jobs. In the context of The Gathering, this initiative has proved to be of particular significance in expanding employment. Second, the car scrappage scheme increased the number of jobs in the motor industry by creating an economic stimulus. If the Government is seeking examples because it may be soft on this issue or because some of its economists are making flawed judgments, I have provided two perfect examples of stimulus packages working. Will the House debate alternatives in advance of the Government's discussion on the Estimates? Perhaps the Minister or Minister of State could attend the House. Will the Leader provide at least an hour for a debate on this issue?

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