www.finegael.org

Our national debt is spiralling out of control, leaving a huge burden for future generations. But massive Government tax increases and cuts in investment in recent budgets are not the solution.

Fine Gael believes the only way to break out of this deflationary trap is through a radical jobs and public service reform strategy.

Government borrowing will likely remain at 12% of GDP in 2010 (equivalent to exchequer borrowing of about €20 billion), the highest in Europe after Greece. And the national debt is likely to break through €100 billion by the end of this year – almost a four-fold increase since 2007. And this not even include additional bail-outs by this Government for the banking system.
While the December tax take appeared strong, the rate of deterioration in the public finances has not improved in any meaningful way and it would be foolish to assume that these figures represent a turning point. We have seen false dawns before in the public finances.

Unless we fix the public finances, Ireland will end up spending twice as much on debt servicing than on education within a decade. That’s why Fine Gael has committed to eliminating the gap between day-to-day revenues and spending by 2014.

Half the battle in fixing the public finances is getting people back to work. In Fine Gael’s view, the “fiscal crisis” cannot be separated from the “jobs crisis”.

By adopting policies that are destroying jobs, this Government is chasing its tail. The 16% increase in taxes in 2009 made Ireland a less attractive place to work, to invest and to do business. That’s why tax receipts fell by €10 billion and are expected to fall again in 2010. And the €4 billion in cuts announced in December will be offset by higher debt servicing costs and welfare payments to the unemployed.

And we can’t go back to the well this year to look for more tax increases or cuts in the capital programme, social welfare rates and public sector pay. For Fine Gael, the only way to break out of this deflationary debt trap is through an ambitious growth, jobs and genuine reform strategy, based around:

A €900m euro Jobs Tax Cut that will lower business costs, boost our competitiveness, provide an incentive for businesses to hire again and create 35,000 jobs over the coming years.
A big stimulus to investment in our dilapidated energy, water and communications networks that are holding back the economy. Fine Gael’s NewERA plan would over 100,000 new jobs, thereby cutting the deficit by €4.0 billion.
Paying people to work or train, not to lie idle. Fine Gael’s Alternative Budget would have shifted €365m from social welfare spending to supports for second chance education, training and work.
Transforming the public sector to do more with less. For Fine Gael real reform is about getting rid of the centralised bureaucracy and over-management that ties our public services down. We want to give power back to the front-line professionals and public service users that are much better placed to decide how scarce resources can be best used.

Politics must lead the way in reforming the public service. That is why in Government, Fine Gael will ask the people to consider amendments to the Constitution to abolish the Seanad, to cut the number of Dáil deputies by up to 20, to strengthen Dáil committees, and to change the electoral system.