Friday, June 4, 2010

Ireland: Fine Gael attacks Pat McArdles half baked analysis of the economy in Irish Times article

FG disagrees with Pat McArdle analysis

Fine Gael Deputy Finance Spokesman Kieran O’Donnell TD has said he fundamentally disagrees with Pat McArdle’s article published in the Irish Times, which takes a very blinkered view of the state of the economy.

“Pat McArdle heaps criticism on the Opposition, but forgets that Fine Gael was the first Party to highlight the scale of the fiscal crisis. We highlighted the need for current spending cutbacks while the Government was still denying there was any problem at all.

“His opinion that the taxation receipts from ‘spending is holding up well’ and may yet offset the significant shortfall in income tax receipts is fundamentally flawed. Tax receipts related to consumer spending are irrevocably linked to the state of the employment market. As a result of catastrophic job losses and a labour market which continues to deteriorate, it is likely that spending related tax receipts are likely to undershoot the already lowered government projections. By his own reasoning, putting faith in spending is ‘absurd’. The reality is that job creation is the key to recovery.

“Pat McArdle made extensive analysis in his piece of the Exchequer Returns, which were released yesterday, but makes no reference to other relevant figures released on the same day, namely the Live Register figures, which swelled again in May. Since this latest Fianna Fáil Government took office, live register figures have increased massively.

“He lauds the Government while forgetting some crucial facts: that 55% of fiscal measures have been cuts in capital investment or tax increases, not current spending cuts. This approach to the public finances will not protect growth and jobs.

“Most of the current spending cuts have been in pay, welfare entitlements and services. Only one in ten of Colm McCarthy’s recommendations have actually been implemented. And nowhere does he mention the fact that unemployment is now at 13.7%, its highest level for 15 years.

“The biggest omission that all the necessary pain in the last three Budgets has been completely undone by the billions in likely taxpayer losses from the Government's banking strategy. Fine Gael instead seeks to break this negative cycle through a programme of innovative economic measures.”

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