The Fianna Fáil/Green Party budget represents a savage attack on the working class of the Twenty-Six Counties. The economic recession has been used as a means to drive down the pay and conditions of workers, to cut welfare payments and to slash public spending in areas such as health, education, housing and transport.
In total there have been cuts of €760million (£687million) in welfare payments, almost €1billion (£904million) in day-to-day public spending, €1.3billion (£1.2billion) in public sector pay and a further €1billion in capital spending. Those who were in no way responsible for crashing the economy are paying the highest price. While Twenty-Six County Finance Minister Brian Lenihan claimed in his budget speech that “The effort demanded of every citizen in this Budget is substantial, but it is the last big push of this crisis”, the reality is that the richest section of society can continue to enjoy their vast wealth, while the poorest and most vulnerable are being forced to carry the burden of the recession.
Yet the budget proposed no increase in income tax, no increase in property tax, no increase in corporation tax. Nor was there any proposal to take into public ownership the ‘pot of gold’ that sits off west coast in the form of oil and gas reserves. The protection of the rich at the expense of the least well off is evident in some of the savage cuts imposed in welfare and public sector pay, these include:
- An across-the-board cut of 4.1 per cent on all welfare payments (except the state pension); those entitled to unemployment allowance, carers allowance, the blind pension, disability allowance, invalidity pension and one parent family payment amongst others will experience an average weekly reduction of €8.30 (£7.50) per week. In addition young people have been singled out for particularly draconian cuts. Those new applicants for jobseekers allowance who happen to be under the age of twenty-one years will receive a payment of just €100 (£90) per week while those between the ages of twenty-two and twenty-four years will receive €150 (£136).
- Public sector workers earning below €30,000 (£27,000) will have their pay reduced by 5%, with additional cuts for those earning above this amount. This is addition to a cut of 7% in the form of a pension levy last April. Thus the pay of the lowest paid public sector workers has been cut by 12% in less then twelve months.
- Child Benefit has been cut by €16 (£14.50) per month
- Medical card holders face the imposition of a fifty cent prescription charge and there is an increase in the threshold for the Drugs Payment Scheme from €100 to €120 (£109).
These are merely the headline figures which were set out in Lenihan’s speech. In addition the budget also sees cuts of almost €1billion in day-to-day spending, most of which Lenihan chose not to announce during the course of his address in Leinster House.
The health budget has been slashed by a staggering €400million. In education a phenomenal €134million is clawed back by cuts in the school transport scheme; the back to education allowance; VTOS allowances and third level student grants. A €4million (£3.6million) ‘rationalisation’ of teacher supports is code for cuts in funding for children with special needs.
A €50million (£45million) cut in the Department of Employment and Enterprise will see a reduction in grants for Community Employment schemes as well as cuts in Community Employment and Jobs Initiative allowances. The €15million (£13.6million) cut in the budget for the Department of Community, Rural and Gaeltacht Affairs will mean cuts in community development programmes, drugs programmes and funding to the Gaeltacht and for the Irish language.
Cuts of €78million (£70.5million) in the Department of Environment and Local Government will see a reduction in the state’s commitment to social housing, which will result in the state withdrawing from the building and maintenance of public housing. There will also be significant cuts in public transport with a €60million (£54million) cut in the budget for the Department of Transport. In addition to these cuts Lenihan confirmed that domestic water charges will be imposed next year.
The basis for this savage budget was laid out in the McCarthy report published last July, which proposed public spending cuts of €5billion (£4.5billion). The report’s solution to the crisis of capitalism was for the state to slash and burn across the public services: it proposed 5 per cent cuts in all social welfare payments; 20 per cent cut in child benefit; 17,300 job cuts in the public sector; €44million (£39.8million) cuts in community development programmes; the privatisation of public transport, the introduction of domestic water charges; a reduction in the third level maintenance grant; cuts in Community Employment schemes and the Gaeltacht and Irish language.
The report of the so-called ‘An Bord Snip Nua’ pressed for the speedy implementation of public spending cuts which it argued would “minimise the need for tax increases”. Thus the essence of the McCarthy Report has been fully implemented in this budget and the neo-liberal principles of cuts to public spending, privatisation of public services and the deregulation of the market are firmly enshrined in Dublin government policy.
The international financial markets that Lenihan was so keen to impress in his speech will surely take great solace from this. He stated that: “The measures we have taken have been commended by international bodies such as the European Central Bank, the European Commission, the IMF and the OECD. They have also won the approval of the international markets.” Thus some of the most vulnerable people in Irish society are being forced to live on less than €200 (£180) per week in order to keep the IMF happy – a truly rogue organisation that has imposed massive human misery on some of the poorest countries in the world through so called ‘structural adjustment programmes’.
The Dublin government has worked assiduously over the last number of months to ensure that the blame and the burden of the capitalist crisis will be foisted on workers and those on welfare. Over the last year over €60billion (£54billion) has been pumped into bailing out banks and property developers. The establishment of NAMA, the nationalisation of Anglo-Irish losses and the injection of €7billion (£6.3billion) of tax-payers money into Allied Irish Bank and Bank of Ireland has been the government’s response to the failure of the capitalist system.
Propping up a failed system while slashing public spending is the ‘logic’ of neo-liberal economics. At the same there has been a sustained and vicious corporate media onslaught against public sector workers. In addition private sector and public sector workers have been pitched against one another. This strategy ensured that the focus of attention was taken from those responsible for collapsing the economy.
The cheerleading is being led by the Sunday Independent whose owner Tony O’Reilly has good reason to redirect public anger towards workers rather than capitalists. One of his companies, Providence Resources, which owns sixteen per cent of the Dunquin gas and oil reserves, benefits enormously from the government’s oil and gas giveaway.
For over six months the corporate media has demonised public sector workers as it sought to generate support for the bizarre notion that slashing public services and cutting pay and welfare was somehow ‘common-sense’. The corporate media played a central role in creating the conditions for a backlash against the public sector, notwithstanding the fact that 40 per cent of public sector workers earn less than €40,000 (£36,000) and that the level of state spending on public services in the Twenty-Six Counties has been consistently below other European Union states.
In fact at thirty per cent of Gross Domestic Product, public spending in the Twenty-Six Counties is below that of the United States of America. Yet senior bankers, who were largely responsible for bringing the economy to its knees and only continue to operate because the massive state bail-outs, continue to be paid annual salaries of hundreds of thousands of euro.
Throughout the course of the last year unemployment rates have risen dramatically. There are currently 412,000 people on the live register, an increase of 150,000 since November 2008. The Lisbon Treaty referendum was re-run in October, a treaty that codifies the principles of neo-liberal economics into the EU, it was sold to the electorate on the basis that a Yes vote was essential for job creation.
Given the numbers out of work and the fears people had of what the future might hold the Treaty was passed. Since October thousands of job cuts have been announced and it appears is predicted that tens of thousands of more jobs will be lost in the coming months. This budget offers absolutely nothing to the hundreds of thousands who are currently unemployed.
The working class who gained least during the course of the Celtic Tiger are paying a heavy price for the failings of capitalism. The Dublin government’s agenda is clear: private capital will be defended at all costs while the poorest and most vulnerable are forced to live on less than €200 per week. If you are unlucky enough to be under the age of 24 you must survive on between €100 and €150.
For the political establishment in the Twenty-Six counties the poor have always been expendable. In 1924 during a debate on unemployment in Leinster House the Cumann na nGaedheal Minister for Industry and Commerce Patrick McGilligan suggested that: “There are certain limited resources at our disposal. People may have to die in this country. And may have to die of starvation.”
This budget represents the beginning of a much wider agenda. Over the coming three years the Dublin government is proposing to impose additional cuts in the range of €11billion (£9.9billion). If the government is allowed to proceed with this agenda it will involve massive jobs cuts in the public sector; the imposition of domestic water charges and the privatization of a range of public services.
In addition the pay and conditions of workers across all sectors will be slashed and the minimum wage will be reduced. Indeed it won’t be long before the media starts talking up the need for ‘flexible’ work arrangements and the ‘rationalisation’ of the public sector in order to improve ‘competitiveness’.
The only way in which this agenda can be defeated is for workers and communities to organise and mobilise on the streets. This Saturday 12th December the United Alliance Against the Cuts have organised a rally commencing at 1pm on Parnell Square, Dublin. It is vital that workers and communities come together and show this government that the working class are determined to defeat their agenda.