Madam, - I have to take issue with Pat Rabbitte's response to the Government's progress report and especially his ludicrous suggestion that the parties in Government are claiming credit for items "which would have happened regardless of what parties were in power" (The Irish Times, July 26th). As the progress report highlights, Ireland today has the lowest level of unemployment in the European Union. We also have the lowest tax wedge in the EU for the average single worker and the second lowest national debt. The fundamentals of our economy are sound - and, contrary to the Labour leader's assertions, this has happened by choice, not by chance.
On May 17th, 2002 the Irish people overwhelmingly rejected the policies of Fine Gael and Labour. Had the opposition parties won the last election, there should be no doubt that the economic state of the country would be very different.
Based on their policies, Ireland would now be a country where higher taxes were spent compensating taxi-drivers to the tune of €400 million, millions more spent on reimbursing Eircom shareholders and the national finances would once again revert to the tax, spend and borrow model of the 1980s.
Pat Rabbitte may wish to delude himself by claiming that no matter who is in government, the prosperity and progress of recent times is a given; but there is no escaping the fact that Labour's policies at the last election, if implemented, would have returned Ireland to a downward spiral of borrowing for current spending, of job losses and of emigration.
The Government's progress report points to the benefits this country has accrued from having low taxes. Indeed, Ireland today has the second lowest overall tax burden for business, consumers, employers and employees in the EU. Mr Rabbitte's suggestion that this would have happened no matter who was in government does not tally with Labour's own commitment to pay for its unsustainable plans by raising taxes on business and on capital and so reject the lessons of the past by driving investment and jobs out of this country.
Had Labour got into government it was pledged to raise Capital Gains Tax to 40 per cent which would have been detrimental to our national finances. From 1997 to 2004 Capital Gains Tax reductions from 40 per cent to 20 per cent saw a 781 per cent increase in receipts. It also remains Labour Party policy to increase PRSI; this amounts to a tax on employment. Such a policy choice would have dire implications for attracting investment into this country and, contrary to Mr. Rabbitte's claims, would push back up our unemployment rate, which at 4.3 per cent is currently half the EU average.
The Government's progress report also points out that Ireland now has the second lowest national debt in the EU and that as a result an additional €1 billion is being spent on public services that would otherwise have been allocated to debt servicing.
This was obviously ignored by the Labour Party leader as part of his sorry attempt to reduce political debate to the level of "Don't pay any attention to our policies, just vote Labour!" Yet the reality is, as the costings at the last election showed, that implementing all the Labour proposals would have increased national debt by 51 per cent, returning our economy to the days when it was the basket case of Europe.
Contrary to Pat Rabbitte's contention, policies do matter. Since 1997, it has been good government, sound policies and the hard work of the Irish people which have transformed this country for the better. It would, however, be naïve in the extreme to take such success for granted and assume that irrespective of who is in government in the future, Ireland will continue to make the right strategic decisions in a competitive global environment. - Yours, etc,
JOHN CURRAN TD
(Fianna Fáil),
Leinster House,
Dublin 2.