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As Economy Freefalls Politicians Invisible...

A nation in crisis, politicians invisible...

POLL: Seventy-four per cent want Dail to be recalled immediately:



The public is demanding that politicians come off holiday following the publication last week of the worst mid-summer economic data in living memory.


Almost four months after the Government introduced an emergency Budget designed to stabilise the economy, exchequer figures show that the situation is getting perilously worse.

Since that Budget on April 7, tax revenue has continued to decline at an alarming rate and current spending has continued to increase unchecked.

The result is that the budget deficit has widened dramatically in a month, by almost €2bn, at a time when the Government had hoped it would reduce following its imposition of painful income and pension levies and tax increases. On top of that, Live Register figures, also published last week, show that almost 350 people a day are now losing their jobs.

Politicians, meanwhile, are on holiday, with no intention of returning to Leinster House until September 16.

Taoiseach Brian Cowen was yesterday officially on holiday, said by his spokesman to be at home in Tullamore, Co Offaly; Finance Minister Brian Lenihan is on holiday, whereabouts undisclosed.

While they, and seven other Cabinet members are officially confirmed to be on holiday, crucial decisions remain untaken on proposed Nama legislation which may help free up essential bank lending to employers, and on the McCarthy report, the introduction of which will help bring about essential savings in out-of-control Government spending.

Mindful of the current calamitous state of affairs, the public want the Dail to be recalled immediately, according to a Sunday Independent/Quantum Research nationwide poll.

Conducted on Friday night among a sample of 500 people, a massive 74 per cent said the latest exchequer and Live Register figures, and the continuing confusion over Nama, required that the Dail should be recalled. Just 26 per cent, or only over a quarter of those polled, did not feel the Dail should be recalled.

Asked who they thought was running the country in crisis last week, over half (57 per cent) said they did not know. Seventeen per cent thought Mr Cowen was running things; 15 per cent said Tanaiste Mary Coughlan was; and 11 per cent thought Finance Minister Brian Lenihan was in charge.

The public is almost equally angry with the Opposition for abandoning the country en masse in a week which confirmed that the economy is still in freefall while important legislation and decisions remain to be implemented.

Asked if they thought Fine Gael leader Enda Kenny and Labour leader Eamon Gilmore had been effective last week, an overwhelming 79 per cent said no, while just 21 per cent said yes. Yesterday Mr Kenny was said to be "on holiday" at home, but going away next week; Mr Gilmore was said to be on holiday in Poland.

The public does not want an election now: 45 per cent said they wanted an immediate election but 55 per cent said they did not.

The possibility of an election increased significantly last week, however, following the resignation of two TDs from the Fianna Fail parliamentary party. The Government is now precariously dependent on the vote of Ceann Comhairle John O'Donoghue to ensure a Dail majority.

The resignations of Jimmy Devins and Eamon Scanlon has sent a deep shiver of unease through the parliamentary party. "They have done something that is going to create huge difficulties for the Government," one senior Fianna Fail TD said yesterday. Another said: "There is no doubt their actions have destabilised the Government."

A majority of Fianna Fail TDs who have spoken to the Sunday Independent said that the decision of the two to resign was a result of a "disconnect" between ministers and the parliamentary party. "There were frantic moves by the party to keep them onside, but the bottom line is, the Taoiseach and his ministers are just not listening to us," a TD said.

Another TD said further resignations from the parliamentary party could now be expected. "The decision of the lads in Sligo has given licence to it. It is now almost more attractive to be outside the parliamentary party," a TD said.

There is a feeling within the Fianna Fail parliamentary party that Mr Cowen is "a blown fuse", "damaged goods", "not credible anymore", "not bringing the troops with him", and that if a challenge to his leadership was mounted it would be successful.

However, nobody within the parliamentary party can yet see such a challenge being made.

There is some concern this weekend that Fianna Fail's coalition partners, the Greens, who are closely monitoring dissent within Fianna Fail, may move first to pull out of Government, perhaps when the Greens' membership vote on a renegotiated Programme for Government.

However, most Fianna Fail TDs expect the Government will "hang together" until the Budget, scheduled for December, in which the Government will announce the aspects of the McCarthy report it intends to implement.

At this stage, though, a significant number of Fianna Fail TDs privately admit that they are not confident sufficient support exists to ensure the Budget will be passed. "I would put it 60:40 against at this stage," one TD said.

Another TD said that the support of former minister, Michael Lowry could no longer be taken for granted. "Put it like this, Lowry is not going to be around for the crucifixion," a TD said.

With the Government seemingly in the process of tearing itself apart, the economy is continuing to fall apart.

Exchequer figures last week showed that tax revenues collected by the Government up to the end of July were €575m lower than the Department of Finance expected a little over three months ago.

The shortfall in tax receipts has trebled over the last month. The Government is now likely to be unable to meet its projection of €34.4bn in tax revenues this year.

The exchequer deficit grew to €16.4bn at the end of July, compared with €14.7bn at the end of June. The deficit, which is almost €10bn higher than it was this time last year, includes €6bn in payments to bail out the banks.

The latest exchequer returns point to further weakness in the economy, led by a decline in consumer spending. The gap between the projected and actual level of VAT returns, an indicator of economic consumption, widened to €448m and accounted for most of the shortfall.

Finance Minister Brian Lenihan increased the VAT rate from 21 per cent to 21.5 per cent last October. He also increased a range of other taxes. The subdued state of the labour market was reflected in a worsening shortfall in income tax receipts, which are €185m behind the Government's targets.




Report by JODY CORCORAN, DANIEL McCONNELL and JOHN DRENNAN - Sunday Independent.

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