The sustainability of borrowing and debt levels will soon become the biggest looming question we face in seeking to shape a post-Covid world, the Fine Gael PP Chairman Richard Bruton has said.
Deputy Bruton, a Dublin Bay North TD, said he welcomed the useful analysis provided by the Parliamentary Budget Office published this weekend on the sustainability of the accumulating debts which we will have as we emerge from the Covid crisis.
Deputy Bruton said: “The mathematical models put forward by the Parliamentary Budget Office shed little light on the policies we shall need.
“The sustainability of borrowing and debt levels will become a major question later this year as we seek to shape a post-Covid world. Some will advocate for the retention of every support programme, arguing that people have made so many sacrifices. Others will argue the books should be balanced as quickly as possible, so that future generations are not lumbered with the cost of today’s demands. Both groups miss the point.
“It is the things we choose to spend on in order to underpin sustainable development which will decide the sustainability of debt. There is nothing as wasteful on our resources as allowing large numbers of people to remain idle when so many needs are to be met. We must be ambitious in our spending plans, but we must spend in the right way,” Deputy Bruton said.
“The ‘Golden Rule’ of only borrowing to create assets that will yield value in the future may not be fashionable among economists nowadays. However, there is a world of difference between investing in assets which serve our society in the long term, compared to spending in an effort to support previous living standards, or trying to resuscitate activities which are no longer sustainable.
“We are entering into a period when transformative change is needed. Many aspects of the activities we have been used to are no longer globally sustainable. However, it is cynical to call for transformative change but then refuse to build it on solid foundations.
“Some of the political parties who advocate the highest ambition for tackling the Climate Crisis are the very same ones who refuse to consider putting a rising price on the creation of carbon emissions that cause the problem, and without which the challenge cannot be met.
“The same groups want every support programme maintained, but pretend that some phantom group, the super-rich will pay for it.
“This is a time of opportunity to create a vision of the sort of Ireland we want to create now and for coming generations. I have set out in my submission on the Review of the National Development Plan some of the exciting opportunities to do this which will create the sources of prosperity and quality of life for the future.
“The sustainability of debt will be decided by one thing only, namely our ability to make the right choices in investment for long term sustainable economic and social success. We are far from fully equipped to do that.
“There are glaring gaps in capacity which we must urgently address:- the capacity of the State to drive regional dispersion of population in a compact sustainable way; the weaknesses of DPER project evaluation methodologies which undervalue long term transformative projects (which their attitude to the National Broadband Plan exposed); and the questionable capacity of many public bodies to deliver complex projects efficiently; the manifest flaws in public procurement policies.
“This is the agenda which must be embraced when we talk of long term debt sustainability. Politics must create the space for a national debate about it,” Deputy Bruton said.