Initial Response to the Medium Term Economic Strategy

Posted on Tuesday, 26 November 2013

The Medium-Term Economic Strategy fails to provide an acceptable guiding vision or a sustainable policy framework for the years ahead. Its approach is lop-sided and most disappointing.

The Government’s guiding vision (page 44) focuses almost exclusively on business and business interests. Social Justice Ireland believes the guiding vision should also envisage an Ireland where everyone would have what they require to live life with dignity and to fulfil their full potential. This would include sufficient income, access to services they need and active inclusion in a genuinely participatory, democratic and sustainable society.

At its core the Strategy fails to recognise the essentially complementary nature of economic and social development - two sides of the one reality. 

Economic development is essential to provide the resources necessary for social development. But social development, in turn, is essential because there can be no lasting economic development of any substance without the provision of social services and infrastructure. All one has to do is reflect on the importance of a good education system for the development of a ‘hi-tech, hi-spec, smart’ economy.

Social Justice Ireland welcomes:

  • The fact that Government has produced a Strategy.
  • The commitment to have a Comprehensive Review of Expenditure before Budget 2015.
  • The recognition that spatial policy development must support the delivery of efficient public transport.

Social Justice Ireland is disappointed that:

  • The Strategy foresees more than 190,000 people unemployed in 2020 compared to 101,000 in 2007.The Live Register numbers will be substantially higher than that.
  • Full employment is defined as “approximately 5 to 6 per cent”. This is a very worrying re-definition of full employment.
  • The OECD recommendation on introducing a universal basic pension scheme is ignored.

It is untrue to claim, as the Strategy does, that “social cohesion has remained strong” and that “the fiscal adjustment has been achieved as fairly as possible”.  The crisis of recent years has produced a fractured society, a weak economy, persistently high unemployment and emigration.

Recent studies have shown that the poorest ten per cent of the population lost more than 18% of real disposable income compared to 11% loss among the richest 10% since the crash of 2008. The situation would be worse if cuts in services and increased charges are included in calculations.

Government budgets in those years saw the richest 10% take the biggest hit but the poorest take the second biggest hit. The gap between low and middle-income Ireland on the one hand and the rich on the other hand has widened dramatically since the crash. This is a major challenge to social cohesion.

This Strategy proposes nothing to rectify this situation.

Ireland badly needs a guiding vision and a viable policy framework that would secure both solidarity and sustainable recovery in the decade ahead. This Medium Term Economic Strategy 2020 provides neither. 

Social Justice Ireland's  'A Policy Framework for a New Ireland' is available here.