13 June 2018; Leo Varadkar, T.D, on Centre Stage during day two of MoneyConf 2018 at the RDS Arena in Dublin. Photo by Stephen McCarthy/MoneyConf via Sportsfile

Jul 1, 2020 | Ireland, Politics | 0 comments

Government can choose how divisive this recovery will be

13 June 2018; An Taoiseach Leo Varadkar, T.D, on Centre Stage during day two of MoneyConf 2018 at the RDS Arena in Dublin. Photo by Stephen McCarthy/MoneyConf via Sportsfile
Stephen Moynihan

Written by Stephen Moynihan

In Ireland,PoliticsIreland, Politics

Leo Varadkar raised eyebrows when he stated that the coming economic recovery could be “very divisive”. The government has a choice in this matter.

8min Read

Stephen Moynihan

Written by Stephen Moynihan

In Ireland,PoliticsIreland, Politics

8min Read

Leo Varadkar raised eyebrows when he stated that the coming economic recovery could be “very divisive”. The government has a choice in this matter.

Leo Varadkar raised eyebrows yesterday (30th June) when he stated that the coming economic recovery could be “very divisive”.

Speaking to the Washington based Atlantic Council, the newly-crowned Tánaiste and Minister for Enterprise, Trade and Employment stated that “For us the economic situation is very worrying. If you include subsidised employment and government schemes and so on, we’re well over 20 per cent unemployment now – we had full employment in February – so it’s a very serious economic crisis and one that’s very unequal.”

“It’s the private sector workers who have lost their jobs – whereas the public sector did not – and maybe younger people and migrants in precarious employment who lost their jobs, whereas people working for big companies, multinationals, in the professions, in the public service, have been largely unaffected financially.”

The sort of straight-talking from Varadkar should be welcome, Ireland’s population deserves to know how contemporary issues are perceived by those in power. However, the fact it was made during a virtual event of the Atlantic Council raises the question of how much of this was intended to be heard by the general public.

The Government is not powerless in determining how divisive the economic recovery from COVID-19 needs to be. Varadkar’s acknowledgement that young workers and migrants are being most affected suggest that the government could target their policies towards these demographics, ensuring an equitable recovery. Any measure such as an increased in the differential of jobseeker’s allowance based on age must be avoided. Indeed, a reversal of this system altogether would be welcome to ensure workers aged under-25 can live with dignity.

The mentioned “big companies” and “multinationals” could also be told to contribute more to Irish society. Government’s propensity for undercutting our European neighbours in terms of corporate taxation rates mean that exchequer revenue from these activities is less than it could be. Yes, these corporations provide jobs, but this does not preclude them from their moral obligation to society.

However much the State may wish to deny it, Ireland is by any measure a corporate tax haven. This fact limits the ability to create a socially just society, both nationally and globally. It is an immoral system and a government seeking to create a less divisive economic recovery would take sensible, measured steps to change this. A reorientation of government policy from focussing on big business to instead funding public services would create a more equitable future.

Social Justice Ireland has raised a number of points on how the government could create a more equitable society than the one envisioned in the Programme for Government. These include a greater investment in public housing; introduction of a minimum effective rate of corporation tax; a strategy to tackle youth unemployment; and the implementation of a system of Universal Basic Services. They also highlight pension reform as an issue of social justice.

There is good in the document, as this publication has discussed previously. However, the government must ensure that the vulnerable – economic or otherwise – are protected during this recovery, as was not the case during the last economic crisis. Cruel austerity cannot be a part of the package.

The new government had the opportunity to create a vision for a more equitable society going forward when formulating their Programme for Government, and indeed they still do as they will be in power for the next five years. It is impossible for a recovery to be completely harmonious, however it would be folly to suggest that there is no way of making it as equitable as possible. The Fianna Fáil-Fine Gael-Green Party coalition have choices to make going forward. If they sow division they must be held accountable.

It’s not good enough to suggest that there is no alternative.

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