Boom turns to bust

By the end of the 1990s economic development in the Republic of
Ireland was so rapid that a totally unprecedented situation arose.
The biggest challenge facing the minister for finance, Charlie
McCreevy, was finding new ways of spending the huge amounts of
revenue suddenly available in the state coffers.

Public spending increased in all departments and, even in the area
of personal social services – for many years the poor relation –
money appeared to flow freely. Service managers used to talking in
thousands were getting used to referring to millions.

One of minister McCreevy’s crazier ideas to get rid of the
embarrassment of riches was the introduction of special interest
saving accounts (Sisas). The idea was to give anyone who could save
up to 200 Irish pounds per month, for five years, a 25 per cent a
year tax-free bonus. Since there was too much money in the economy
it was in danger of overheating. So, to cool it down we were told
that people needed to rediscover old-fashioned virtues such as the
habit of saving.

Needless to the say the Sisas were taken up with gusto by many
thousands of enthusiastic savers. Competing banks offered
additional interest on top of what the state was giving; so the
rush to sign up resembled the chariot race from Ben Hur.

The fact that it meant an enormous transfer of money to the
better-off who could afford to put away IRE £200 a month
seemed irrelevant.

However, the print was hardly dry on the Sisa contracts when the
cracks in the plan became apparent. First, other tax breaks had
gone too far, so the overall tax-take was down.

Then the foot and mouth crisis happened; followed by the terrorist
attack on the World Trade Centre in New York. No official alarm
bells rang until after last May’s general election, before which
the electorate was assured that the economy was performing

Suddenly, belts had to be tightened, and “adjustments” were
necessary across the board. The word “cutback” was not appropriate
however, apparently because more money than ever was still being
spent. It seems that the word “cutback” only applies to money, not

The short honeymoon enjoyed by personal social services managers
was over. Suddenly, the old days were back and we were once again
living beyond our means.

And the Sisas? They’re safe and cannot be cutback. Their legal
contracts give them total protection. Any change would mean massive
legal liability for the state. Obligations to the less well-off,
however, are flexible and they have to make do with

Kieran McGrath is senior social work practitioner, St
Clare’s sexual abuse assessment unit, Dublin

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