From Socialist Voice, September 2008

The rotten carcase of the Celtic Tiger

Unemployment figures for August show a dramatic increase, which has now reached a ten-year record, according to the Central Statistics Office. The decision by the Government to bring the annual budget forward by two months is a clear signal that the economy is in free fall, managed by a Government in panic, whose only answer to the growing crisis is to attack workers and their families and the services they use and depend on.
     The number unemployed reached 235,000 in August, the highest since December 1998. In the last twelve months the figure rose by 73,800, or 6 per cent of the work force, an annual increase of 42 per cent, which is the highest recorded. 7,400 of the newly unemployed are males, which is a reflection of the growing crisis in the building industry. This has resulted in a shortfall in stamp duty of €480 million, a 45 per cent drop on last year, and a shortfall in capital gains tax of €436 million, 39 per cent below target. This fall in receipts means that the shortfall for this year will most probably exceed €5 billion.
     In July the Government forecast a drop in tax revenue of €3 billion for the year, while there has also been a greater slowdown in consumer spending than expected. The exchequer returns show that tax revenue at the end of August was €2.8 billion lower than expected. The total tax revenue for the first eight months of the year, at €24.7 billion, was 9½ per cent lower than in the same period last year and 10 per cent below budget projections.
     The exchequer deficit has trebled over the last year. All tax revenues were down for the first eight months. The biggest shortfall was in VAT receipts, which were €1.177 billion or 11½ per cent below target and 6 per cent down on last year—a reflection of a significant slowdown in consumer spending.
     The Minister for Finance, Brian Lenihan, has now stated that the Government will breach the borrowing guideline of 3 per cent of gross national product under the EU “growth and stability pact.”
     Not alone are the seriously underfunded health and educational services going to come under renewed attack but public services across the board will experience substantial cuts.
     According to a new index, the activity of 39 per cent of services firms declined in August, which is another record. A similar study on manufacturing industry shows that employment has declined in each of the last nine months as firms were hit by higher costs and a drying up in demand for their goods from domestic and export markets.
     Data on official redundancies published by the Department of Enterprise, Trade and Employment in August shows that there were 7,148 redundancies in service industries so far this year and 6,588 redundancies in manufacturing and engineering.
     Working families now face serious problems on many fronts, including rising fuel and energy costs and increasing interest rates on mortgages and credit card bills, with factory closures being announced almost daily.
     People honestly followed the illusion of an unending upward economy and of unsustainable life-styles peddled by the mass media and encouraged by a charlatan political establishment. Many people borrowed seven times their annual salary (including bonus and overtime payments) to get a home, which is now under severe threat. Our public services, which never recovered from the last onslaught in the 1980s, now face renewed attacks.
     The Government has squandered the wealth generated by working people over the last decade. We saw little of the benefits from the sweat of our labour, and the gap between the rich and the poor is far greater now after a decade of the “Celtic Tiger.” Yet we have a labour movement that has swallowed the guff and false promises peddled by all governments and is sleep-walking into more of the same, overseeing another assault on its members’ livelihood and living standards.
     The stench from the rotting carcase of the “Celtic Tiger” is now seeping into every home in the country, and working people will be paying for a long time for the clean-up.

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