Interesting to read Charlie McCreevy's comments on Sean Healy of CORI, insisting that CORI's economic policies would "banktupt the country" and that Healy preaches "nonsense." I've been reading CORI's economic policies for some time and there is much of interest to read. What is particularly sad is that McCreevy seems to have blown up the entire premise of CORI's policies rather than a handfull of deeply flawed policies.
So would CORI bankrupt the country? One of their policies certainly would. I have written before about how Basic Income, if implemented on CORI's plans, would remove any initiative from a huge percentage of the population to work, particularly the "real" low paid - workers earning less than the mythical average industrial wage and the minimum wage - who make up at least 50% of all workers, who would lose substantially under the process. Meanwhile productivity would collapse and multinational investment would dry up - causing a thunderstorm of job losses that I would estimate would result in as much as 50% unemployment - surely catastrphic. In the meantime, as so many people would have no incentive to work and investment would be withdrawn, tax receipts would collapse - eventually bankrupting the country. McCreevy is coldly accurate here.
Another policy that CORI argues for would also see a potential for bankrupting the country - the imposition of a minimum level of social welfare cover equal to 1/3 of the "average industrial wage." The AIW is simply too high to sustain such a rate, and as I have argued consistently, it is not an international standard measure (which is why I refer to it as the "mythical" AIW - I would estimate that the real average salary is actually about 2,000 to 3,000 less, but the AIW has been invented to artificially inflate wages for political purposes - which means that if the rainbow coalition were re-elected and adopted a more international standard for assessing wage levels, it would actually show a drop - thus insinuating failure on the part of the coalition). I have also argued previously that the cash figure does not include secondary benefits which are now claimed by a high proportion of claimants - medical card, rent allowance, telephone allowance, free travel, fuel subsidies, which if added to the 1/3 would actually mean that somebody on welfare would be better off than a working adult - which would cause strategic unemployment to soar (and destroy tax revenues as well as eating up taxes). Instead I would suggest that social welfare increases follow average wage rises rather than inflation. This would mean a proportionate increase that is tied to potential increases in tax revenue - and so is affordable.
CORI's suggestion however, that Ireland's tax take is too low, and that an increase in income and corporation tax is badly needed, is not inaccurate. The point is made that even to harmonise tax rates with the UK would generate 10.3 billion a year in extra revenues to the exchequer. This could easily be raised and would have a more equalising effect. Lastly, CORI is quite right when it points out that McCreevy has dramatically increased the risk of poverty for 700,000 people in Ireland. (Although I would argue that most of this is due to "housing poverty", where people do not own their own homes or have guaranteed tenure at an affordable rate).