In the past couple of years, do you ever get the feeling that Ireland has just lurched from one blinding panic to another like a cat on a hot tin roof?
If so, you definitely aren’t imagining it.
Don’t get me wrong: basically every country on earth freaked out about Covid and was hurt by it financially. Even no-lockdown Sweden experienced job losses and financial setbacks – nobody went unscathed, and some damage was always going to be unavoidable no matter what we did.
But Ireland in particular went a little bit overboard to put it mildly, even compared to our European peers.
After having the longest and strictest lockdown of any European country according to Oxford University, we ended up amassing an astonishing €40 billion in extra debt, bringing us close to a quarter of a trillion quid in the hole.
Bear in mind our debt was bad before Covid – we were the third most indebted country in the developed world per capita in 2019. Now, we’re number one in Europe – around €20,000 higher than the EU average per head of population.
— Irish Times Business (@IrishTimesBiz) March 8, 2021
We experienced the highest percentage per capita debt increase of any European country, clearly demonstrating that ours was not a typical Covid response. We absolutely freaked out over the virus for years, and now we will be quite literally paying the price.
It doesn’t take a genius to figure out that these loans were not free money. Every cent of that borrowed cash will have to paid back by you, by me, and by our collective children and grandchildren for decades to come.
Already, the government is warning of tax hikes in the coming budgets, as people already struggle with an ongoing cost of living crisis. Your pay packet is about to get a lot lighter.
— Independent.ie (@Independent_ie) March 4, 2021
And so, as people flounder from the sharply rising cost of fuel, food and other items, the government simply can’t afford to implement the substantial tax cuts needed to ease the crisis. Maybe, if we’d been a little bit more restrained during Covid, we could absorb this shock – but not anymore. At least, not without even more crippling tax hikes on the horizon. We’re just kicking the can down the road.
While they implemented a relatively small, temporary reduction on excise duty for fuel last week, even Finance Minister Paschal Donohoe admitted that the government “cannot protect citizens and businesses from the entire cost of the impact.”
Even this modest, short-term tax cut will cost the State a whopping €320 million – a move which wouldn’t even be necessary if the government had not spent years shutting down Ireland’s energy independence.
Donohoe says the government will have to stay the course with the carbon tax hike due in May. In other words, not only can the government not afford to substantially reduce taxes on key goods, they’ll actually have to put them up soon.
No plans to stop carbon tax hikes despite inflation pressure https://t.co/237hMe0mMF
— Irish Examiner (@irishexaminer) February 5, 2022
And now the government is looking at spending the State’s €4 billion emergency Covid fund on hosting tens of thousands of Ukrainian refugees.
Taoiseach says €4bn Covid fund can be used to help Ukrainian refugees in Ireland https://t.co/XDjCD1b3iG
— breakingnews.ie (@breakingnewsie) March 13, 2022
Whether you agree or disagree with this move is not the point. Maybe it’s a totally valid decision. But €4 billion is a shocking sum of money, especially in light of what we’ve spent already in the past few years.
All of this underscores the absolutely dire, essential need in this country for fiscal responsibility within the State.
For years, even before Covid-19, it felt like everything in Ireland, from housing, to health, to law and order was falling apart – not to mention a whole host of other issues. Basically every area of society you would want to function properly, wasn’t.
From the multi-million euro Dáil printer on the micro level, to the multi-billion St. James’ children’s hospital (delivery date TBD) and the massive cost of the rural broadband plan at the larger scale, it just never ended. We may as well have saved Revenue a lot of time and paperwork and just put our money directly into the nearest furnace or shredder.
You’re talking about a State that spends €6 billion per year on NGOs, the vast majority of whom create nothing and spend their days ranting about how climate change is sexist and trans men need abortions. There are still dozens of Quangos which the government identified as useless wastes of taxpayer money a decade ago, which are still up and running today.
Our hospital system was on the verge of being overwhelmed literally on an annual basis for a decade – even before Covid hit.
When you continually piss money away non-stop, and you can barely even run basic services during normal times when everything is calm, then you have absolutely no cushion to fall back on at the first problem. You can’t deal with even the mildest of crises or absorb even slight shocks without running into catastrophic debt. And that’s exactly what’s happening to us.
This country is being run like a child who just nicked their Daddy’s bank card, or a party animal who won the lotto and is now off on a wild bender. This reckless splurging will catch up to us eventually, and when it does, it will hurt big time.
We badly need leaders who are willing to ruthlessly slash government waste and bring back a shred of fiscal responsibility to the State. Until and unless that happens, we are all in for a world of financial pain.