THE Government’s Six Year Strategy for Growth was published last week and local TDs divided along predictable lines when reacting to it.
One of the striking things in the document are forecasts for unemployment in the coming years.
Given two sets of economic assumptions, one said to be base line and the other high growth, unemployment will fall, but recovery will take years.
Under the base line figures it will be 2018 before the rate of unemployment goes under 10%. At the end of the plan’s term, in 2020 it would be 8.1%.
Under the high growth scenario, unemployment would be 10.2% in 2016, while it would still be at 5.9% in 2020, still slightly shy of full employment.
Inevitably, there is an element of aspiration behind these, with some shocks inevitably going to come over the coming years.
Labour TD Michael McNamara said the current situation, with a slowly advancing economy, is “like taking the first steps again after a bad accident or a bad fall”.
He said the plan is all about putting in place an economic basis that wouldn’t be as vulnerable to wild swings. “Sustainable recovery is the key to it. We were kind of looking down our noses at mainstream European economies like France and Germany when we had a completely unsustainable bubble economy, but it has to be sustainable this time, we can’t continue with boom and bust.”
The Scariff man said it’s vital that people have some more security, and aren’t effected by swings to the extent seen in Ireland over the last 10-15 years. “There’s a need to have some kind of predictability so people can invest in their futures. How many people borrowed money for houses at overly inflated prices based on incomes which are now illusory? We have to give people a degree of predictability so people can organise their affairs.”
He feels that there is evidence of improvement, but that it isn’t being felt in Clare, or in neighbouring counties to date.
“I do feel that there’s an improvement, but I know that’s hard to explain or put your finger. When I drive up and down to Dublin now it takes a lot longer than it used to, there’s a lot more traffic on the roads, people are either going to work or going shopping, either way it provides wealth in the economy. Either people who have money are starting to spend it or there’s more employment, I think it’s actually both. I do realise though that the sort of economic recovery that’s underway in Dublin, and I think also Cork, hasn’t hit the Mid West and that’s a problem,” he concluded.
Of course the plan didn’t win much support from political opponents, who were vocal in their criticism last week.
Fianna Fáil’s Timmy Dooley said there wasn’t enough information about how credit would be made available. “It’s light in detail and at the end of the day it doesn’t set out any strategy for the most critical issue facing business and that’s the capacity to get access to credit. Without resolving that issue then job creation targets are really irrelevant.”
He claimed that the programme for Government raised the prospect of a strategic investment bank being founded, but said there is no sign of it happening. He also claimed this could be done by using money from the national pension reserve fund to leverage money on the international markets.
Fine Gael’s Joe Carey praised the Strategy, saying it goes beyond simplistic, quick fixes. “The plan doesn’t attempt to identify short term ways to inflate growth, rather it sets out the principles to raise the potential growth of the economy in a sustainable manner over the medium term.”
He also said it is essential that a future boom/bust cycle is prevented.
His party colleague Pat Breen said that the Strategy aims to boost employment and the Government’s focus will be on that now. “The exit from the bailout was a milestone in Irish history and the Government are anxious now to move forward and to build on the progress made over the last two years. The focus is very much on job creation and bringing down the unemployment figures.”