Spinning the Budget

by Jonah Wed Dec 03, 2003 20:36

Sinn Féin Spokesperson on Social and Community Affairs Seán Crowe TD speaking during the Budget debate in the Dáil said: "This is a minimalist budget designed to placate backbenchers in the run-up to elections next year. It has done nothing to address the gross inequality that exists in Irish society."

Introduction

Speaking after the publication of the Estimates a few weeks ago, Father Peter McVerry said that the poor in society had been shown the two fingers by the Government. Any hope the Government might have had a change of heart between then and now disappeared as Minister McCreevy made his budget statement. The Government has not just given the poor and the disadvantaged the two fingers a second time it is asking it to be grateful for the abuse. The seventh in a seemingly endless sustained and vicious assault on working class people in Ireland.

The most regrettable aspect of it is that the Minister had an alternative. He had many alternatives and they were outlined for him in alternative budgets and pre-Budget submissions made by a range of organisations, including Sinn Féin. He chose not to use them and in doing so I have no doubt his name will become a curse for hundreds of thousands of people across this state.

This is a minimalist budget designed to placate backbenchers in the run-up to elections next year. It has done nothing to address the gross inequality that exists in Irish society.

His miserly increases in social welfare, barely keeping above inflation, have already been wiped out with other cuts in social welfare already announced in the Book of Estimates and through the introduction of numerous stealth taxes during the last year.

Again, on Taxation, Charlie McCreevy has left his big business buddies and high flying executives untouched.

However, unfortunately for those on low incomes, the Minister again failed to take minimum wage earners out of the tax net. He had an opportunity to take everybody on the minimum wage out of the tax net with little extra cost in relative terms yet he flunked it once again.

Sinn Féin in principle welcomes the move towards the decentralisation of Government Departments but wonders about the timing of such an announcement considering that it has been on the cards for over four years. I will reserve judgement until we see the detail because my fear is that this is being done at this time to impact on next year's local elections and to allow Fianna Fail and PD councillors to make grandiose claims about job opportunities in there particularly constituencies.

At the end of the day this is yet again another failed opportunity. Charlie McCreevy had tinkered at the edges of our taxation system when fundamental and real reform was required. He has not done anything to end inequality.

Poverty

"It is the children living in poverty in Ireland who have been most betrayed by this Government. Despite 300,000 children living in poverty in this state Minister McCreevy has shown contempt, where he should have shown compassion. The Government promised the people that Child Benefit would be increased to €149.50 and €185.40 by Budget 2003. They broke that promise. They then renewed it, saying they would achieve those figures in Budgets 2004 and 2005 under Sustaining Progress. The increases announced today fall far short of coming close to those figures; €16 short for the lower rate and €20 short for the higher rate. These are the increases the Government must deliver next year in order to make good their promise a mere two years late, but at the current rate of spending they will fall well short.

Education

"While Sinn Féin welcomes the increase in the amount of money provided for school buildings in this Budget, we are aware that it is far below what is needed. The move to multi-annual funding is welcomed but €200 million a year is €100 million less than what INTO and the Department of Education agree is needed over a five year period. That is what is needed to eliminate the school building waiting list. That is what is needed to ensure our children are educated in safe and secure environments.

"We also need more support to get children into those schools. The National Education Welfare Board received little joy in the Budget Estimates. It can currently only cater to 26% of schools, despite the recommendation of an independent consultancy that they need a staff of 363 people to fulfil its legal obligations, by the end of this year, the new staff the Government is providing leave it with less than a third of that number. The Minister has failed to provide sufficient funding to meet the needs of the NEWB, to meet the demands of the Education Welfare Act, and the children who fall through the cracks in our schools every year will pay the price. Young people have a tendency to pay the price at the hands of this Government. The urgent need for a mere €5 million for funding for youth work, outlined by the National Youth Council of Ireland, has also been ignored by the Minister.

Conclusion

"The Minister has often spoken of how prosperous this State has been over the last five or six years, the success of the Celtic Tiger, and he has not been slow in taking credit for it. Such statements show a basic lack of understanding of economic theory. Almost a hundred years ago James Connolly, (a man I quote often in the hope the Labour party might recognise the name), pointed out that such economic growth "...is purely capitalistic prosperity-that is to say, prosperity gauged merely by the volume of wealth produced, and entirely ignoring the manner in which the wealth is distributed amongst the workers who produce it.

"Talking about the wealth produced in society without looking at how it is distributed is the kind of shallow, childish economic thinking that Minister McCreevy is capable of. If the economy is growing but the workers and the poor are not benefiting from it, they might even be worse off and certainly the rapid increases in relative poverty indicate this is so, can the Government truly claim that the growth is benefiting the people?

"In conclusion, this Budget, like last year's and the one before it, represents a failure by this Government to tackle inequality in Irish society that will have implications for many years to come. This Government has failed the working class, it has failed the poor, the disadvantaged, the vulnerable and the voiceless. As long as it remains in power, inequality and poverty are inevitable

as the Government pursues the interests of the business class."

by Jonah Wed Dec 03, 2003 20:37

Sinn Féin Spokesperson on Agriculture and Rural Development, Martin Ferris TD, has criticised the failure of the Budget to adequately provide for the future of rural communities at a time of radical change.

Deputy Ferris said:

"There are some positive aspects to the Budget. I welcome the commitment to further decentralise Government Departments and hope that this will be extended. Sinn Féin also welcomes the increase in the tax relief on leases and the lowering of the qualifying age to 40. More, however, needs to be done to encourage the entrance of trained younger farmers

"I also note that nothing has been done to reverse the cuts in the budget available to Teagasc, and that this will continue to have a detrimental effect on the levels of research and training available to farmers. In general I am disappointed that more has not been done to establish the kind of programmes that will be necessary to help farmers adapt to the changes brought about by the reform of the Common Agricultural Policy

"What is required is a new strategy that will allow farmers to take advantage of decoupling, and to prepare rural communities in general for the future. The Rural Social Scheme announced in the Budget and the funding made available for it, will be inadequate to fulfil that task. Besides, rural communities will suffer as much as everyone else from the consequences of the failure to protect public services."

by Jonah Wed Dec 03, 2003 20:38

Sinn Féin spokesperson on Housing Arthur Morgan T.D. speaking following the Budget announcement has angrily criticised the Minister for Finance Charlie McCreevy for ignoring the housing crisis once again.

Deputy Morgan said

"This Budget will have done absolutely nothing for people attempting to house themselves and their families. What is in here for the 48,000 people on housing waiting lists in this State, 85% of which have an annual income of less than €15,000 per year? The Government has chosen to attack rent allowance for the second consecutive year. This measures will, I have no doubt, bring about an increase in homelessness where vulnerable people will find that they cannot get into the private rented sector.

"It is a year since the Government abolished the first time buyers grant, leaving people in that category much worse off. The Government should have reinstated this measure in today's budget and applied it to new and second hand homes.

"The failure to address the problem of local government funding is also exasperating the housing crisis. Because local government is not being properly funded local authorities are imposing heavy development charges which are passed onto the new house buyer making houses increasingly unaffordable. Some authorities are seeking to get out of housing provision altogether.

"It is scandalous that this budget does not include an immediate ending of tax relief for speculative buyers of second homes and the restoration of gains tax to its 1997 level of 40 per cent.

"This budget shamefully fails to make adequate funding available to increase the total social housing rental stock to bring about the reduction and elimination of housing waiting lists. This Government seems to think such a housing waiting list and the huge difficulties with affordability of housing is a perfectly acceptable part of life for the disadvantaged of this State."

by Jonah Wed Dec 03, 2003 20:38

Sinn Féin Spokesperson on Culture Aengus Ó Snodaigh TD has welcomed the Government's extension of the Section 481 Film Industry Tax Relief until 2008 as a "rational decision to save a vibrant Irish industry," but maintained that the Government's plan to raise the ceiling to €15 million from 2005 was insufficient to attract the big budget films that are the biggest earners for the local economy.

Deputy Ó Snodaigh said:

"While I believe that the ceiling should have been at least doubled to €21 million, I certainly welcome that Minister McCreevy looked at the evidence of the 3:1 return on investment, and the thousands of jobs that were at stake had he proceeded with his plan to eliminate Section 481, and finally saw reason. I also welcome that the Minister for Arts John O'Donoghue eventually took this issue on board after intense lobbying by the sector and by opposition politicians such as myself.

"The ordinary workers in the film sector who were galvanised into action by the bid to save their industry are to be congratulated for a well-organised and successful campaign. But others were not so lucky -- the most vulnerable people in this state did not get an eleventh hour reprieve. However, the film workers have proved the value of one important maxim: don't mourn -- organise. Their efforts and success in this regard is something I want to see replicated by other sectors that are differentially impacted or threatened by this Government's successive budgets and by the cuts that will still go ahead in 2004."

by Enough Wed Dec 03, 2003 23:14

Use a link instead of copying and pasting Sinn Fein press releases. This isn't the Sinn Fein website.

by Finacle Thu Dec 04, 2003 11:23

Kudos to Sinn Fein for publishing a credible alternative budget (however misguided it may be).

It is easy to criticise the budget after the fact and pick holes in it. The organisation I belong to uses key metrics year-by-year to judge a budget by; e.g.

72% of tax is paid by the richest 19% of people.

Approximately 6% of tax is paid by those on or below the average wage.

by Yossarian Thu Dec 04, 2003 13:07

Are those figures made up to to show the type of research your group does or are you suggesting them for real. If you are suggesting them for real, perhaps you could link to the site where these figures are derived from. Not being sceptical or anything... :)

by Finacle Thu Dec 04, 2003 16:00

I quoted those two figures as examples, but they are real.

I will dig out relevant links and publish later today or tomorrow morning.

Note; Before I get accused of being 'selective' I accept that these two statistics when taken in isolation without context or trend present a quite positive view, and that's why I chose them.

by Finacle Thu Dec 04, 2003 16:11

....apparently Bertie Ahern alluded to these two statistics (among others) last night on the news!

He quoted a figure of 70% of tax being paid by 20% of people (which is close-ish to what I had posted) and confirmed the 6% figure.

I hope to post further (independant) details tomorrow.

by Joe Thu Dec 04, 2003 16:56

"72% of tax is paid by the richest 19% of people."

This is a bit meaningless in itself.

For starters what is meant by tax above? Is is PAYE (ie are the bosses already excluded) or is it all tax on income. Does tax include VAT (which in proportional terms will hit low earners highest). Does it include indirect taxes? Does it include stealth taxes (ie bus fair increases?).

Finally to give any real meaning to this figue we would have to know what share of the national wealth this 19% have? If for instance this was 90% and the bottom 6% only hold 1% then this would lead to rather different conclusions as if this was 70% and the bottom 6% held 5% of the wealth.

I'm genuinely interested in what is actually meant by tax here and what the relevant shares of the wealth are.

by Finacle Thu Dec 04, 2003 18:16

Agreed. These are completely out of context by themselves.

To elaborate;
'Taxes' includes all personal taxes (i.e. taxes for which one is personally liable). That includes VAT on purchased goods as well as our old friend bin taxes. It does not include bus fares.

Re the "share of the wealth";
I don't have this information. At a guess I would imagine that less than 19% of the population probably have more than 70% of the wealth (in common with most developed capitalist countries). I would suggest that it is probably not as high as 90% [remember we are talking about PERSONAL taxes here].

If you are interested in another statistic (again, totally arbitrarily selected with bias etc etc); the total amount spent on the health service is equal to the total amount of income tax paid by everyone in the country.

by Donal Thu Dec 04, 2003 19:17

Finacle, what is your organisation?

by Finacle Fri Dec 05, 2003 12:04

I'd rather not say for the moment.

What I will say is that it is not a politically aligned organisation (but probably culturally is more of an "establishment" group).