From Socialist Voice, November 2008

Workers and the poor to pay for the crisis

Well, the era of the “Celtic Tiger” has definitely passed, and we are facing into the era of the Celtic Nightmare, as the present Government with this budget drops the mask of being a “caring” Government for “all the people.” You could split your sides laughing at the Minister for Finance calling on the people to be “patriotic” if it was not such a serious time for the Irish working class and our country.
     As we showed in the last issue of Socialist Voice, it was clear from statements coming from the Government and the constant stream of economic experts on radio and television and in the newspapers, all demanding that the Government rein in day-to-day spending, that the budget was going to be one of slash-and-burn of public services.
     The burden for solving the crisis was going to be placed on the backs of the poor and working people. It is estimated that 300,000 people in Ireland are living in consistent poverty, which means they are deprived of basic necessities, including adequate heat, food, or clothing.
     Research published by the Combat Poverty Agency shows that more than 700,000 people are living on an income of less than €220 per week. So much for Government policies tied in to “social partnership,” in which a commitment was given to eliminate consistent poverty by 2016.
     The Government has produced a budget that includes
• a 1 per cent levy on workers earning up to €100,000 (gross earnings) and 2 per cent on €200,000 and over;
• a charge of €100 for visiting a hospital emergency department if you have not first visited your local doctor;
• a charge of €200 on free car parking provided by employers, which will make commuting to work more expensive;
• a cut in children’s allowance for eighteen-year-olds, which will result in a drop to families of €1,000 from 1 January 2009 and €2,000 in 2010, and the ending of child benefit for eighteen-year-olds from 2010;
• an increase in pensions of €7 a week from next year;
• an increase in fuel allowance of €2 a week, to €20 per week;
• a reduction in job-seekers’ allowance of three months;
• an increase of 0.5 per cent in the higher rate of VAT;
• changes to child benefit for children aged five and a half, which will result in a loss of €550 per year to some households.
     The increase in welfare payments of 3.3 per cent will not be enough to match inflation and the rising cost of fuel, food, and other basic necessities. The 1 per cent levy will hit low-paid workers hardest, though the unions secured a commitment from the Government that those on the minimum wage of €8.65 per hour would be excluded—this despite the fact that the unions negotiated an extra 0.5 per cent in the national wage agreement now being voted on for what they termed low-paid workers earning just over €11 an hour.
     The Government estimates that it will get €1 billion in additional revenue from the levy; and we know from experience that once such levies are introduced they become permanent.
     This is just an increase in tax by another name. As figures from the Central Statistics Office clearly show, nearly 10 per cent of people living in consistent poverty are in fact in employment. This levy, therefore, will further reduce their income and drive the working poor further into poverty.
     Those who have been made redundant will face a three-month reduction in the period in which they receive the “job-seeker’s allowance” as they join the tens of thousands of workers chasing after fewer and fewer vacancies.
     The increase in VAT will also disproportionately affect working people and the poor, as they spend most of their disposable income on basic necessities. It is estimated that consumer price inflation is increasing at a rate of more than 4 per cent, with many households already struggling to cope.
     Education has also come under the hammer. Irish children already experience one of the highest pupil-teacher ratios in Europe and will be further disadvantaged with the possible loss of another 1,200 teachers from the primary system and 1,000 from the secondary system.
     This will lead to further social disruption as more children leave our education system with learning difficulties, causing frustration and alienation in working-class communities. How can any society call itself just or democratic if it refuses to provide decent education to all children?
     Given the assault on working people in this budget—and it’s clear that future budgets will not be any better but in fact will be a lot worse—where is the labour movement? The national debt will go through the roof, as a number of banks will be calling on the Government’s rescue package. The National Pension Fund will probably be raided to recapitalise the banks, pouring workers’ pensions down the drain—good money after bad.
     Why is the labour movement not demanding the establishment of a state development bank to begin the necessary task of building a more stable and sustainable economic base, built on our own resources? Shouldn’t we be putting the National Pension Fund into a state bank, and all other pension funds, and using it as seed capital?
     Then we could seriously talk to people about patriotism, and let them lodge their saving in a safe and secure place that could be used to develop our country as our people see fit.
     Why should we bail out the banks? This is all about socialising the debts of banks and finance houses, speculators and other gangsters while profits remain firmly private and, in most cases, offshore. This Government is making workers pay for a deeply flawed, unjust and bankrupt system.
     There is no fear that the rich in our society will be standing in queues waiting for a hospital appointment. Their children will not go every day to overcrowded schools with overworked and stressed-out teachers. Their pensions are well secured, and their vast wealth will be safely offshore, where no-one can touch it.
     After nearly a decade of multi-million profits made by banks, finance companies, speculators, and developers, where have all these profits gone?
     Those who frequented the Fianna Fáil tent at the Galway Races over the years have been richly rewarded. The appeal to patriotism—like taxes—is meant only for small people.

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