Neither Berlin nor Boston but Bust…
As a parent, one of the lessons we teach our children is that when they make mistakes, they should learn from them. Sadly, this Fine Gael/Labour government has not learned any positive lessons from previous Fianna Fail corruption and incompetence.
Austerity is not working. The Irish Times of the 17th December reported that, according to CSO figures, the domestic economy suffered its sharpest fall since the worst of the recession at the end of 2008 and investment in the economy has fallen to its lowest level since records began in 1997. This is after approximately €12.5 billion has been cut from the economy since 2009. The additional cuts in the latest budget can only further depress the economy.
Investment is the key to economic recovery. Investment drives growth, employment and productivity yet the recent Budget provided not a single opportunity for job creation or economic growth. At a time when our unemployment rate has reached a staggering 14.5%, the failure of the Budget to address this crisis is unacceptable. Instead, it was another attack on the poorest sections of Irish society while once again leaving those responsible for all our woes, untouched. For example, an across the board cut to certain child benefits which affects the poorest in society was implemented while those who can well afford to forgo such child benefit will still be able to collect to what basically amounts to them as ‘petty cash’. Sadly, the families most penalised in this budget are single parent households, a section which can least afford to be penalised for the economic crimes of others. This is the very section of society most affected by cuts to the fuel allowance and to the back to school allowance.
For working families, increased taxation through stealth taxes will reduce their already depleted household incomes. Additional costs on petrol, bus fares up 15%, VAT increased on basic household necessities, educational cost increases as well as the totally inequitable Household Tax will only draw further money out of the economy, increasing unemployment as retailers and other suppliers make staff redundant or close. Even a family earning €50,000 per year will suffer additional cuts of €2,000. A recent study showed that many households only have €70 a month left after their bills are paid. This misdirected budget will further deflate the economy and continue the economic slump.
While the queen of misery, Joan Burton had to rescind her plans to penalise young disabled people, Labour and Fine Gael have imposed other cuts to mental health and children services. A massive cut to Community Employment schemes will see some family’s losing necessary parts of their incomes while community, youth and senior citizen facilities will close. Enda Kenny insists on paying his glorified office boy €35,000 extra but wants CE workers to lose their jobs.
I have continually said that one of the most important ways for Ireland to increase growth and employment is through education and retraining for the unemployed. We cannot compete, nor should we try to, with low cost economies. We need to use education as one of our prime economic stimulators. What has this budget brought about to achieve this? Absolutely nothing. Private fee paying schools remain subsidised by the taxpayer to the tune of €100 million a year while class sizes and college fees are now increased. Another sign of who this government is pandering to.
So what sector did the government try to stimulate? The property sector! The very sector which collapsed because previous corrupt government policies created a false economy. Labour and Fine Gael want to offer more tax incentives to get people buying houses. Sound familiar? This is the same government which is allowing NAMA to off load prime properties in a fire sale while continuing to pay €200,000 to the very developers whose unpunished gambling caused our financial meltdown.
One tax already proposed on houses is the new Household Tax. This is a totally inequitable tax which sees multi-millionaires pay the same amount as ordinary families. Starting off at €100 but predicted by the ESRI to increase to over €1,000 per year, this tax will further reduce the spending power of ordinary families and decrease the money in the actual economy. Labour TD Joe Costello told a meeting recently that this tax was ‘simply about raising money with no return for the householders”. A genuine property tax, which targeted those who could afford to pay, is an acceptable source of revenue for any government. The Department of Finance estimate that a Wealth Tax would raise €500 million but this Government has made the political choice of not introducing a Wealth Tax while targeting the most disadvantaged in our society. Once again, the right wing Fine Gael and their ‘ministerial seats at any price’ lackeys in Labour have deliberately protected their wealthy backers at the expense of the rest of us.
While we all realise that Ireland is in dire financial straits, a situation brought about by a cabal of corrupt politicians, financiers, developers and their legal advisors, we cannot continue to pay off debts to European speculators while allowing our economy to go further into recession. Cuts to the capital budget may look good in Berlin or Paris but in reality they equate to job losses in Ireland and a further depression in the economy. A proper government must stimulate the economy through increasing investment, thereby increasing employment and the spending power of people. One source of finance for such an investment program would be to immediately stop the payments to the bondholders of Anglo-Irish and Irish Nationwide Building Society. This would save over €4 billion a year in payments for two dead banks. This illegitimate debt is due until 2031 and will cost this country over €80 billion. This debt was not incurred by ordinary people and we should not continue to pay it.
This budget has singularly failed to offer any prospect of economic growth for the Irish nation. Its rationale is all about slashing budgets to pay off financial speculators at the expense of our economic development. Poor and working families will continue to suffer while those who brought about the downturn remain untouched and protected by their glove puppets in Fine Gael and Labour.