The Government should make reversing the rise in unemployment its key priority in the current economic crisis, the Labour party leader Eamon Gilmore said tonight.
Speaking at his party’s local election selection convention in Co Donegal this evening Mr Gilmore said that the current crisis in public finances is a consequence of the “collapse in economic activity and the rise in unemployment”.
He told party delegates that a rise of 1,000 in the live register figures costs the Exchequer €11m per annum before any loss of income tax is considered.
Mr Gilmore said: “Some economists are now warning that the live register could reach 400,000 within the next year…it is unthinkable that this would be allowed to happen.
“Apart from the devastating social consequences of seeing the number of unemployed exceed the levels experienced in the 1980s, it would plunge the public finances into a downward spiral the likes of which we have never seen before”.
Mr Gilmore hit out at the Government by calling its plan to cut €2billion from public sector pay bill as “back of the envelope economics”.
If you cut a public servant’s pay by €1,000 per annum, the saving would be about €500 as the balance would have gone back to the Exchequer anyway through income tax, VAT and excise,” he said.
He said that although public service workers should not be “victimised” for a crisis they did not create they cannot "expect to be immune from the corrective measures that need to be taken”.
"Public sector pay constitutes a very significant part of public expenditure and must be in the mix in terms of any remedial measures".
"However, public sector workers and public sector pay have become the subject of many myths and the soft target of right-wing politicians and commentators," he said.
Mr Gilmore also reiterated his calls for an early election saying: “If the country is to be rescued and downward spiral reversed, we need a change of government with a renewed mandate, fresh faces and new ideas”.
