Congress Rejects 'Facile Exercise in Scapegoating'

1 Mar 2011

Congress today (March 1) described attempts to blame social partnership for the economic crisis as a "facile exercise in scapegoating designed to obscure the true cause of the collapse: banks, builders and toxic Government policy."

Speaking in response to the publication of a new report on the record of the Department of Finance, Congress General Secretary David Begg said the key issue was not the record of individual Government departments, but of overall Government policy from 1997 onwards.

"This is about the policy of the Government that came to power in 1997. They were hell bent on cutting taxes for the wealthy and deregulating whole swathes of the economy. One of the first acts of that Government was to cut the 48 percent top rate of tax. It is a matter of public record that Congress opposed that decision.

"Their entire philosophy was laid out clearly by the then Tanaiste, Mary Harney, in her infamous 'Boston v Berlin' speech, delivered in 2000. She spoke of a country 'that believes in the incentive power of low taxation.....that believes in economic liberalisation.....that believes in essential regulation, but not over-regulation.' Anyone wanting to trace the roots of this crisis only has to read Minister Harney's speech.

"The cumulative effect of those policies was to entirely erode the country's tax base and inflate the boom," Mr Begg said.

"Within the social partnership process - which also included employers, farmers and the community sector - Congress was a lone voice in opposing this economic philosophy, whether that was in the form of tax cuts for high earners, tax breaks for business or privatisation. Again, that is a matter of record. And we cannot recall ever receiving support from the Department of Finance on any of those issues, quite the contrary.

"Where increased social spending arose it was almost entirely due to substantial inward migration, mainly from Eastern Europe. That meant more public transport, more demands on health, bigger schools and language support teachers."

Mr Begg said a major examination of social partnership carried out by the ESRI had found its impact had been positive, in terms of job creation and encouraging Foreign Direct Investment (FDI).

 

 

Note to Editors

 

A fuller examination of Congress policy over the years can be found at:

 

http://www.ictu.ie/publications/fulllist/submission-to-the-investigation-into-the-banking-system/

 

ends