Opposition parties said today the latest report from Economic and Social Research Institute (ESRI), which indicates that gross national product will fall by 9.2 per cent this year, represented a “damning indictment” of policy failure at Government level.
The report suggested Ireland was set to experience the sharpest fall in economic growth experienced by an industrialised country since the Great Depression.
Fine Gael deputy leader Richard Bruton said the report illustrated the appalling economic catastrophe that the country is now suffering.
Speaking in the Dáil today, Mr Bruton said: “The tragedy is the Government is persisting with policies that will not address these challenges, contemptuously ignoring the warnings deliver to it on an almost daily basis.”
He claimed Ireland stood alone internationally in thinking it could solve the current economic crisis by raising taxes and cutting investment.
A single person on the average industrial pay tax now pays tax at 51 per cent, he said. “How can the Government think that is a strategy for recovery?,” he asked.
Taoiseach Brian Cowen acknowledged the ESRI reported indicated “the very difficult economic situation facing the country”.
But he rejected the Government’s economic recovery plan was the wrong course of acton, saying “we have taken measures to maintain the public finance on a sustainable path” and this had been recognised by the ESRI
Mr Cowen said the ESRI’s report said the corrective action being taken by the Government was the right thing to do “despite the severe short- terms effects”.
He said it was a “difficult balance to sustain public finances and avoiding deflation in the economy” but that he did not underestimate the impact ordinary people.
Mr Cowen said the Opposition’s contention was to continue with public spending at an unsustainable level with “no prospect of returning to growth in the medium term”.
In its spring quarterly commentary, the ESRI predicted 187,300 jobs would be lost this year, making an average unemployment rate of 13.2 per cent.
It expects a further 102,800 jobs to be lost next year, and for the unemployment rate to average 16.8 per cent.
Labour leader Eamon Gilmore claimed all international agencies were saying the same thing, "that Ireland was the worst performing economy in the industrialised world."
The Government has "dug a big hole for the Irish people by the way it mismanaged the economy," he said.
He said the Government's strategy was not designed to grow the economy and would "shrink it instead".
He said the Government had a "dithering approach" which changed from week to week which was adding to the decline in confidence domestically and internationally.
Mr Gilmore said the Government's Budget did not have a plan to grow jobs, and the Government did not have a "job-centred strategy".
Separately Labour Party spokesperson on finance Joan Burton today called on the Government to implement a national jobs plan following the publication of the ESRI report.
"The recent emergency budget was devoid of any serious action to arrest these alarming job losses. The Government must urgently put in place a national jobs plan", said Ms Burton.
The Labour Party's deputy leader said a jobs plan proposed by the party include invrestment in training and job creation schemes where people could keep their social welfare payments while gaining work experience.
