DEFICIT REDUCTION:THE ELECTION will be fought not on the size of the deficit reduction package but on its composition, according to Leo Varadkar, Fine Gael's spokesman on Communications and Energy.
Delivering the keynote address to the Dublin Economics Workshop’s annual conference in Kenmare at the weekend, he said Fine Gael favoured €3 in cuts for every €1 raised in new taxes.
The State is at risk of losing sovereignty as early as January, he said, referring to concerns about the State’s ability to borrow additional funds in the new year. It is up to the politicians to “save the Republic”.
He went on to cover a wide range of economic, political and constitutional issues, with a focus on four planks of Fine Gael policy – restoring the public finances, economic growth, competitiveness and faith in politics.
Mr Varadkar said the Taoiseach should go to the Garda Commissioner and the Director of Public Prosecutions and seek explanations as to why prosecutions had not been made in relation to the banking crisis. He said senior management of some banks appeared to have carried out concealment, which was a breach of company law.
He advocated the creation of powers such as those in the US, where public pensions can be clawed back if those receiving them are found to have done wrong.
He raised the possibility of Nama beginning to sell off properties it has taken possession of and that it accept “a few billion” in losses. This could hasten the finding of a floor for property prices.
He also said that “a whole new welfare system” was needed. Fine Gael did not want to cut benefit rates, but he said much greater conditionality was needed for those who received benefits so that offers of jobs or training could not be refused. He advocated a welfare model of the kind in place in northern Europe.
He described rent allowance as “a poverty trap” which put a floor under rent levels in many areas, to the benefit of landlords.
On public sector reform he said Fine Gael would be launching wide-ranging proposals in coming weeks, and that trade unions and public sector managers had until 2011 to show they could deliver on the reforms set out in the Croke Park deal.
The number of Government agencies and bodies should be reduced he said, even though the savings would be small. This was needed on efficiency grounds, he added. The establishment of a single inspection agency and a single agency to means test benefits was also necessary.
Fine Gael intends to have a minister for public sector reform if and when it returns to power. He said whoever filled the role would effectively share with the Minister for Finance, responsibility for managing public expenditure and the position would be modelled on Britain’s secretary to the treasury.
He claimed €4.5 billion could be raised through privatisation under Fine Gael’s plans.
Current Fine Gael policy is to keep the electricity grid in public ownership, while other parts of the ESB should be sold off. Mr Varadkar said it may be worth considering keeping the ESB together as a single entity, while selling off 25 per cent of it via an initial public offering of its shares.
With €11 billion from the National Pension Reserve fund and monies raised by privatisation, more than €15 billion could be made available to invest in next generation broadband and insulating all public buildings.
A central plank of Fine Gael’s plans for government was restoration of faith in the political system, he said. Faith in politics had collapsed among middle-class voters, he said, while among working-class voters there had always been more scepticism regarding “the establishment”.
