Rabbitte aims to score points on 'ailing' economy

Labour Party leader Pat Rabbitte, has accused the Government of being "complacent to the level of smugness" on the economy, claiming…

Labour Party leader Pat Rabbitte, has accused the Government of being "complacent to the level of smugness" on the economy, claiming that for the first time in 20 years Ireland is no longer paying its way in the world.

Placing the economy firmly on the election agenda, Mr Rabbitte said the combined deficit on our trade and other international dealings totals nearly €13 billion.

"By the time this self-satisfied Coalition leaves office the total will have reached more than €21 billion because the gap in our balance of payments is now running at almost €8 billion a year," Mr Rabbitte told an Association of European Journalists lunch in Dublin.

He said the decline in exports, increases in inflation and the slowdown in the property market posed threats to the economy.

READ MORE

"There are dangers that the train will hit the buffers," he said.

However, Minister for Enterprise, Trade and Employment Micheál Martin hit back last night, saying that Ireland's economy was the envy of the developed world.

"In terms of job creation, disposable income growth, full employment, fiscal performance, ours has been a remarkable performance. However, in a desperate bid to find something to complain about, the Labour leader has seized upon the balance of payments," he said.

"It says a lot about Pat Rabbitte that he fails to grasp that in a single currency area the balance of payments does not have the relevance it once did.

"The Labour leader also alleges that the economy is overheating. If he really believes this, why doesn't he make any proposals to cool it down?" he asked.

Mr Martin also asked if the Labour leader wanted to see tax increases or credit controls. "Again no positive proposals, just the usual negative approach."

In his address Mr Rabbitte said the Government would come to be seen to have failed on the big picture by not keeping the economy on a sustainable path.

"It has failed on the vital details of maintaining competitiveness, developing the country's innovation capacity and providing the right infrastructure in the right places at a cost which will attract good investments."

"The tendency is to continue to rhyme off the achievements - and there have been achievements - and to gloss over the fragilities that are undoubtedly on the horizon, " said Mr Rabbitte.

He said apart from the building industry, very few jobs were being created in the real economy.

"Even with the softest of soft landings for the property market we will find that there are not enough new jobs for the national rise in the labour force, never mind the tens of thousands of immigrants on whom the increasingly inevitable forecasts of long-term growth depend."

Mr Rabbitte said Jack Lynch and Charles Haughey left Ireland the biggest public debt burden in Europe.

"Their successors have encouraged and talked up the creation of the biggest private debt in Europe, now almost one and a half times national income.

He said the Government came into power on the cusp of a boom and has produced a society where the things that don't work are the things for which Government directly has responsibility.

Mr Rabbitte said he is determined that he will give people a choice of an alternative government that will lay out in economic strategy "clear decisions and objectives" on budget parameters, the structure of taxation, and a pension system that will guarantee a decent basic income for everyone.

However, Mr Rabbitte did not outline specifically what those strategies would be. When asked about changes in the taxation structure, he said he would look at tax incentives that encourage people to put money into property and would not change corporation tax.