An End to Austerity?

 
 

With promises that the upcoming budget will lack austerity measures, Robert Dunne looks at why we won’t be saying goodbye to austerity

Ireland is suffering from a budget deficit, increasing debt, the introduction of water charges, high unemployment and a rate of migration at its highest for thirty years. This coupled with an ineffective opposition proves that there’s no reason to believe that austerity will end.

When a country like ours is brought to the brink of economic collapse, with an unsustainable national debt and a budget deficit of 7.2%, there are few options. For some countries borrowing money and increasing the money supply (quantitative easing) are options. However, neither of these can be pursued. The former can’t because Ireland is restricted in its ability to borrow money from other countries. This is one of the reasons why Ireland is dependent on the Troika (EU, ECB and IMF). The latter is not possible because we are in the eurozone.

This leaves us with two options: to increase tax or to cut spending. The aim of any government going through a crisis must be to manage the budget in the most egalitarian manner possible. To date Fianna Fail, Fine Gael and Labour have not done this. Cronyism, corruption and financial mismanagement are rife. Egalitarian budget planning is of course made more difficult when Ireland has to borrow money from the troika just to pay for running of services in the country. Ireland is in desperate need of a political alternative.

The failure of opposition parties and our media to encourage any discussion as to how money could be better spent or what could be done instead of what Fine Gael and Labour are doing in turn helps give legitimacy to their actions. Small left wing parties (mostly revolutionary socialist groups) help to reinforce this idea by offering little more than empty sound bites about taxing the rich. This is outright ignoring the implications of free trade agreements as well as the fact that Ireland is an open economy. The Irish people hear no alternative therefore most presume there is no alternative. When this is the case it’s no wonder that Sinn Feín could come to prominence despite their history and major flaws in their economic policy.

With all these factors considered we can quite conclusively say that austerity cannot and will not end. The budget procedure is done in such a way so that another more egalitarian alternative can’t arise. When the 2015 budget is pushed through at the last minute, the party whip system will prevent any discussion or discourse as to how money can be better spent. Our politicians will be required not to represent the views of their electorate but the views of the leaders of political parties or whoever may be lobbying them.

Of course upon stating all of this one might wish to highlight evidence of economic recovery that has taken place under this Government. Despite the mantra “austerity doesn’t work” there is ample evidence that it has worked but the results have created greater wealth and income inequalities. When one speaks of economic recovery it is important to note that it’s simultaneously possible for the economy to recover and for the majority of the population to get poorer, without seeing any trickle down effect.

Apart from the water charges most of the negative consequences of austerity have not been widely discussed. Quite recently people on defined benefit pension schemes have had money taken from their pensions. You could argue that the fact that our unemployment rate has lowered is a hugely positive consequence. However this is largely due to the fact that this figure does not take into account our high migration rate, the number of people on JobBridge or the number of people seeking jobs who are in full-time education.

This is one of the reasons why a job creation strategy should be a priority. However, with very little EU funding for job creation and no party with a plan that isn’t limited to an empty slogan, Ireland will be dependent on foreign MNCs to create jobs. Some in Fine Gael have proposed cutting taxes to the wealthy in order to help encourage job creation and foreign direct investment.  If Ireland is to prevent a repeat of the economic crisis then it is essential that we focus on indigenous industry.

As our politicians fail to act, all the Irish public can do is hope that this budget won’t squeeze them financially. Even if this budget is going to have worse results for low and middle income earners rest assured there will be virtually no public debate from those TDs within the coalition who are supposed to represent us. There will also be no alternative from our opposition.

Due to dreadful mismanagement of the economy, political games, empty postulating, stifling of debate and opportunism on all sides of our political spectrum the harmful effects of austerity cannot and will not end. It will persist and thousands of people will suffer as a result.

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