The Irish Economy: the Poor Must Pay the Price for Celtic Tiger

For the past ten years the Irish government has spent public money with the financial acumen of a five year old in a sweet shop. Salaries soared. Public servants scaled the career ladder with dizzying speed. House prices shot up. The head of the Anglo Irish bank, the developer bank, popped in and out of government building with astonishing regularity. Consultants fees increased exponentially. Mineral water was put in car engines. Little girls, done up with fake tan and nails, arrived for their first communion by stretch limo or helicopter. Ireland became one of the most expensive countries in the world. Those were the heady days of the Celtic Tiger.

On the other hand, hospital waiting lists tripled. People waited on hospital trolleys for weeks for treatment. Nurses and teachers were striking regularly. The west of the country saw few improvements. There is still not 100% broadband penetration. Travel by rail is prohibitively expensive.The gap between rich and poor widened.

Last November, in line with the rest of the world, the economy came crashing down. Twelve years under Fianna Fáil and the Progressive Democracts (now defunct) and Fianna Fáil and the Green Party (fading fast) have changed the Irish landscape from riches to rags. Now, unemployment and the government deficit is soaring. Services are being cut left, right and centre. Some of this can be explained by the global financial crisis but the truth is that Ireland’s financial disaster is the result of excruciating, and in my opinion criminal, mismanagement of government finances.

The government was so busy riding the property boom and believing it would last forever, and this is the reason that we are currently heading towards oblivion. The government took no responsibility when the crash came and declared that dissent was unpatriotic. We have enjoyed three budgets for the 2009-2010 fiscal year because our Minister for Finance is a jackass who regularly gets his figures wrong.

Anglo Irish Bank, bank of Fianna Fáil and the developers, was nationalised despite its shady dealings, under the counter loans and cooking the books. Irish taxpayers’ money is still being poured into Anglo, AIB and BOI.

Houses lie half-finished on the outskirts of every town. It would be logical to suppose that property developers are going bust all over the country and that house prices are plummeting. Well that assumption is a quarter right. House prices have fallen by some 4-11%. People are facing negative equity and a stagnant market. However, virtually no property developer has declared bankruptcy. It is bizarre. Hundreds of thousands of homes lie empty and the developers can afford to let them lie. Where are they getting the money? Who is paying for these developments?

One developer in Cork has sold a single unit of a 212 apartment complex. It is known that he pays someone to turn on the lights in empty rooms to give the appearance of habitation. Yet he is still solvent.

Last week, the Special Group on Public Service Numbers and Expenditure Programmes (commonly called an Bord Snip Nua)’s report was published and all is explained.We now know whom the bell tolls. It tolls for the taxpayer.

The targets have been laid out with devastating clarity and those targeted in every case are those who suffer already – the countryside vs the city; child vs adult; non-Irish vs Irish; poor vs well off; large families vs families with few to no children. people with disabilities vs people without disabilities.

The government can choose from a “menu” of cuts in public services detailed in the report. Among the options are

– 2000 special needs assistants
– €300 million staffing reduction in the Health Service
– 17 000 jobs in public service
– €14.8m cut in overseas aid
– €27m reduction in tourism marketing
– €6.1million cut to the arts council
– Reduce the Reserve Defence Force by two-thirds
– All social welfare payments cut to one-payment-per-person
– 5% cut in social welfare payments
– 20 % cut child benefit
– 30% cut in Rural Environment Protection Scheme
– Reintroduce fees at third level
– Increase rural school bus fees from €300 to €500
– €100m cut in Science Innovation and Technology

The writing on the wall is clear. Rural Ireland and the middle and working classes will suffer. The report targets schools, health and the unemployed. It is the poor that will suffer for the worst excesses of the Celtic Tiger.

There is no understanding of the human dimension in this report. It is a cold financial analysis. It is unlikely to be a success. There may be civil unrest because the people of Ireland are sick of the government using our money to bail out the banks and now will take very brass penny they can to pay for their mistakes. We will not have it.