The Government should take note of the ESRI’s report on growth scenarios for the Irish economy, particularly the threat of high emigration, Fine Gael said today.
The party's finance spokesman Michael Noonan said the report made it clear that Ireland could not cut or tax its way out of recession, and a job creation strategy should be implemented.
In a report published today, the ESRI said unemployment could fall to pre-recession levels by the middle of the decade, but warned should the economy perform weaker than expected, joblessness would average 7.1 per cent of the workforce in the period 2014 to 2020. It also warned of increasing emigration.
Speaking this morning on RTÉ's Morning Ireland, the ESRI's John Fitzgerald said working to achieve higher growth was important, or else the economy would face further spending cuts and bigger tax hikes.
"The most important thing is that we get the public finances right," he said, adding that borrowing needed to be reduced.
Proposed measures such as property taxes, water charges and taxing child benefit have been put forward as ways to help shore up the public finances.
"All options should be looked at," Mr Fitzgerald said. "We're talking about very serious cuts and increases in taxation. The more options you rule out, the more difficult the adjustment becomes."
The report also said migration patterns would depend on the strength of the wider economy, it says. Under the ESRI's higher growth scenario, net emigration would reach a cumulative total of 160,000 in the five years to 2014 and this would rise to 200,000 if the recovery is weak.
Mr Noonan said the Government needed to examine a number of areas to get the country back on track, including restoring credit lines, the implementation of effective and consistent labour market policies, and tackling high costs and competitiveness to support export-led growth.
"Unless the Government makes these objectives a priority, the ESRI's low-level growth scenario of even higher emigration and unemployment will come to pass," he said. "In particular, unless effective labour market policies are put in place, the next few years will see an appalling combination of high emigration, and high levels of long-term unemployment.
