December 2012        

A vicious anti-people budget

After much hype and kite-flying, and rumours of the Labour Party playing “hard ball” and being the defenders of the interests of ordinary people, we see that it was all just hot air and spin. They are as committed as Fine Gael are (and Fianna Fáil were) to making working people pay for their crisis. The budget is designed to take a further €3½ billion out of the economy through increased taxes and charges, and cuts in public spending.
       This will be the same for the next two to three budgets—all to meet the targets in the “Programme for Ireland” agreed by the external Troika and the internal troika of Fine Gael, Fianna Fáil, and the Labour Party.
      Under the guise of “austerity” there has been a generalised attack on working people, not just in Ireland but throughout the capitalist world. The establishment tell us austerity is necessary to bring government spending back under control and to make “our” economy more competitive. By this they mean that they need to cut wages, cut pensions, cut social welfare, cut public services, to undermine and take away workers’ rights and conditions.
      In their terms, “austerity” is working very nicely. Wealth is being transferred upwards and outwards, and being concentrated in fewer and fewer hands. The transnational corporations are making a killing with bigger profits, and their costs have been reduced. (Noonan tells us the transnational corporations opposed a 3 per cent increase in the universal social charge for those earning €100,000.)
      Those who argue that austerity is not working and that there is some better, fairer austerity have fallen for the ruse. Austerity was never about the people; it was never for protecting jobs and conditions; it was not for protecting the unemployed or pensioners. It is doing exactly what it was planned to do.
      Talking of a “better, fairer way,” of a fairer austerity, is like rearranging the deck-chairs on the Titanic. It’s only a different view of a sinking ship.
      The central question facing our people is the massive debt, at present (depending on how you calculate it) between 180 and 220 per cent of GDP. It simply cannot be paid. The best the Irish state can get will be an extension of the repayment time. Already in 2012 we paid about €7 billion in interest and €5 billion to bond-holders. Where do people think this money will come from? And who is to pay it?
      Every euro out of the pocket of a worker, a pensioner or an unemployed person, every euro taken from the health and education budgets, is to go to the wealthy, to foreign bankers and finance houses in the European Union.
      Both the establishment here and the European monopolies will continue to drive down workers, to extract as much as they are allowed to. They wish to force conditions down to what they believe will be sustainable, regardless of the fact that working people have nothing left to give. This and future budgets are part of that strategy.
      They will continue to push for more and more unless we resist and begin to organise. The system is now entering a period of stagnation, which means they will try to bolster profits by constantly demanding more from workers and the further privatisation of publicly owned companies and public services.
      Those elements within the trade union movement who still believe that the Labour Party in government is the best option for the trade union movement need to seriously study this budget and its central thrust. There is no salvation coming from the Labour Party. Only a militant response from the trade union movement can stop the destruction of our people’s living standards.
      Up to now that leadership has been lacking. The ultra-left have clearly little to offer and have no clear strategy. Their opportunism and their infighting are doing themselves and the wider movement a lot of damage.
      What is required is a fundamental rethinking of strategy. The success of the Dublin Trades Council’s pre-budget rally needs to be built on. People will resist if they are given leadership and have confidence in those who claim to lead them.
      The debt, and our forced repayment of it, are the strategic weakness of the Irish establishment. Repudiation is the only way forward. Breaking it down into “good” and “bad” debt will only confuse and divide people.
      We need to create jobs, we need to control capital in order to give priority to investment, we need public ownership and control of our natural resources to develop them in a sustainable way. Alternatives are possible. What is required to bring this about is the mobilisation of the people.

The budget in brief:

• Children’s allowance cut by €10 per month, from €140 to €130.
• Property tax at 0.18 per cent up to a value of €1 million (the average Dublin home of €250,000 will pay about €450 per year), and rates (local property tax) at 0.25 per cent for houses valued at more than that.
• Abolition of the weekly PRSI allowance for workers; the average worker will pay an estimated €264 more per year.
• Higher weekly rents for people living in council houses.
• “Administration” fees for third-level students, now €2,250, to rise by €250 per year for three years: September 2013 €2,500, September 2014 €2,750, September 2015 €3,000.
• Cuts to the electricity allowance for pensioners.
• Telephone allowance for pensioners reduced by half, to €9.50 per month.
• The back-to-school clothing and footwear allowance to be reduced by €50, from €150 to €100 for children aged up to eleven and from €250 to €200 for older children.
• The prescription charge for holders of a medical card increased from €0.50 per item to €1.50.
• The threshold for the drug payment scheme increased from €132 to €144 per month.
• Cut of €325 to the grant for respite care, to €1,375 per year.
• The number of public servants to be cut by 38,000, to approximately 287,000 in 2013 and 282,500 by 2014.
• Maternity benefit to be subject to tax from July next.
• Eligibility for “jobseeker’s benefit” (unemployment assistance) reduced by three months, from a year to nine months.
• Motor tax to be increased on a sliding scale.
• Excise duty on a pint of beer or cider and a standard measure of spirits increased by 10 cents, and on a 75 cl bottle of wine by €1.
• The eligibility of pensioners for a medical card to be kept under review.
• An increase in the amount that holders of a medical card will pay for medicines.
• The allocation to VECs to be reduced by €13 million.
• Any arrears in the household charge that have not been paid by July 2013 will be increased to €200 and will be collected through the local property tax system.

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