Ireland's adoption of a liberal economic model was a total failure and a major contributor to the country's economic collapse, Irish Congress of Trade Unions general secretary David Begg has said.
Mr Begg said that by cutting its tax base Ireland left itself "totally exposed" when the economic crisis came.
“In addition, the liberal economic model meant low regulation, which was disastrous for this country, facilitating the growth of a cosy, casino style capitalism driven by a tight, golden circle of acquaintances," he said.
“Quite simply, on all the big issues — tax, regulation, governance and development — Ireland pursued all the wrong options."
Speaking at the launch of an Ictu document on the links between official policy and the current crisis Mr Begg said that by reducing direct taxes Ireland became dependent on consumption taxes. "In some ways, it was an illusion as people still had to pay for services (such as GP visits) that in many other countries are free."
The Ictu document warns that Ireland risks a repeat of the practices that led to the economic crash as many of the same bank directors remain in office.
Paul Sweeney, economic advisor with the trade union umbrella group, said he fears reckless lending could begin again if and when the upturn comes. He said 17 of the same directors remain on the boards of Bank of Ireland and AIB.
"It's business as usual," Mr Sweeney said. "If there are green shoots and if the economy recovers these people are bound to repeat history again.
"This is our read of it and it's quite terrifying." Mr Sweeney said he believes there should have been a clear-out of the bank boards.
"Everything could happen again. The recklessness, the overlending, which caused the banks to collapse," he said.
In its submission to the state-backed banking inquiry Congress said that if taxes had not been cut as much during the boom then the public finances would be more stable now.
It claimed slashing taxes, especially from 2001 onwards, boosted private sector spending and inflated the bubble.
The body welcomed Taoiseach Brian Cowen's remarks to the North Dublin Chamber of Commerce in which he admitted that some of the Government's policies, such as tax breaks, exacerbated the collapse.
But it added: "However, his analysis is deficient. He neglected the pro-cyclical tax cutting which was the main cause of the collapse, the lack of regulation, the shareholder value model of company law and the fact that he did not abolish all the tax breaks and left them all in place for many years."
Congress also said it voiced opposition to tax breaks during the Celtic Tiger years and had proposed measures to dampen the boom, such as a land value tax and windfall tax on profits from land rezoning.
It also highlighted its opposition to the explosion in executives' pay, especially in the banks, deregulation and has expressed the need to overhaul corporate governance.
Two separate reports have been commissioned into the banking crisis and both are due to be completed and submitted to Finance Minister Brian Lenihan by the end of the month.
One is from Central Bank Governor Professor Patrick Honohan on the regulatory system, while the second, by Klaus Regling and Max Watson, will be a preliminary investigation into the crisis in the banking sector.
Additional reporting PA
