Country now paying for 'one hell of a borrowing binge'...
WE HAVE been on "one hell of a borrowing and spending binge" in recent years and now we have to face up to a radical change in our standard of living and expectations, the Céifin conference heard.
Jim Power, chief economist with Friends First, said the Government's role in allowing spending to grow by 10-12 per cent a year in recent years was "absolutely criminal" and we would now pay for that mismanagement.
Personal debt rose from €20 billion to more than €140 billion between 1999 and 2007, he said. "That is . . . one hell of a borrowing binge."
Asked about the role of the banks in fuelling spending, Mr Power said he had worked as a banker for 20 "very unhappy years" and the incentivisation structures always worried him.
"You were incentivised on the quantity of what you sold, not on the quality. I think the incentivisation structure did encourage irresponsible behaviour."
He said the Government would have to take tough decisions such as tackling taxation. "I wouldn't be in favour of a significant increase in taxes, but what I do think we need to look at is a significant widening of the tax base. It's not very popular, but I believe a property tax is essential."
He also urged against education cuts, saying education was the key factor if we were to emerge from the economic situation intact.
Mary Forde, principal of the Presentation College, Athenry, painted a bleak picture when she spoke of teachers being forced into parenting roles because some parents were incapable of doing this. "It's not unusual for us to provide breakfast, dinner and supper for some children. And that's not just in my school," she said.
Ms Forde pointed to the Budget cutbacks which will come into force in January, and asked how schools would be able to continue to help such students.
"I really can't go to the convent again, looking for another extension of finance," she said.
Teachers were forced to intervene to assist children from broken homes and many felt they did not have the skills to help. Children from dysfunctional homes have told teachers "I wish there were no holidays" as they went on the summer break, she said.
Ms Forde was delivering the inaugural Patrick Hillery Memorial Lecture. The former president was a regular attender at the annual Céifin conferences.
Bishop Willie Walsh presented the 2008 Céifin award to Dr Hillery's widow Maeve.
Report by ALISON HEALY - Irish Times Newspaper.