Man Overboard but the Ship Sails on Regardless
Deaglán de Bréadún
An otherwise quiet day has been enlivened by a squawk of dissent from the Labour benches. Newly-elected TD Patrick Nulty has announced his intention to vote against the Budget.
Michael Noonan started his Budget speech shortly after 3.45 pm. There was little enough in it for the Opposition to get their teeth into. The increase of two per cent in the higher rate of Value-Added Tax had already been well-flagged.
There were numerous measures to restore the property market from the doldrums. Farmers will be pleased at the measures taken on their behalf – Fine Gael always made sure to look after the agricultural vote.
Broadly speaking, the commitment to keep income taxes and basic social welfare rates at their current levels seem to have been kept. The approach set out by Brendan Howlin yesterday was aptly summarised in the phrase, “Death by a thousand cuts”.
It will take a while for the impact of these stealth measures to become apparent and there will no doubt be weeping and gnashing of teeth down the road.
Already a cut in disability rates for young people is causing a stir. Hardening up the requirements for a widow’s pension is another controversial move.
Every year there is a plethora of scare-stories in advance of the Budget. In the end, the actual measures announced tend to appear mild. It’s the oldest trick in the political playbook.
When Michael Noonan finished speaking today, there was silence from the Labour benches and muted applause on the part of Fine Gael colleagues. Given the parlous state of the public finances, nobody was ever going to mistake Noonan for Santa Claus.
The two speeches today and yesterday were quite a cunning and clever mixture and showed a certain amount of political skill in a very difficult situation. Despite the departure of Tommy Broughan and now Nulty (who needs to cover his left flank from left-winger Joe Higgins), the outlook for this government looks positive for the immediate future. But the situation in the Eurozone is deeply worrying and that, in the end, will probably determine the fate of the Coalition and indeed the rest of us.
Nulty statement issued at 5.06pm today:
“There are four main reasons that I am voting today against the budget. These are:
· It is unjust – it hits people on low and average incomes disproportionately
· It damages our prospects of economic recovery
· Instead of creating jobs it will lead to higher levels of unemployment
· It attacks the marginalised, the sick, the elderly and young people with disabilities
“The household charge combined with the increase in VAT is deeply regressive, unfair and ultimately counterproductive. People on low and average incomes will be disproportionately affected while the wealthy benefit from flat rate taxation levied in this manner.”
“The budget by hitting people on low and average incomes hinders our prospects for economic recovery. Because people on low incomes spend, rather than save or invest, these measures take money directly out of the local economy and hit jobs in the already hard pressed retail sector. There is an alternative to austerity which I have outlined in some detail over the last ten days. TASC, Social Justice Ireland and ICTU have put forward well-researched proposals that can raise billions from the wealthy. I am disappointed that the Government has not taken these proposals on board. Irish concentration of wealth is one of the highest in the EU-15. 28% of all wealth – housing and financial wealth – is owned by the top 1% of adults. The Government should target this wealth.”
“The Government decision to further cut the number of jobs is the last thing we need with soaring levels of unemployment. Specifically they have decided:
· To cut 7,500 direct jobs from the economy next year, due to cuts in capital spending.
· To reduce public sector employment by a further 6,000.
· To make cuts in the social protection budget at a time when the ESRI predicts we are going back into recession next year.”
“The decision to cut child benefit for the 3rd and 4th child is a very clear breach of the pledge by the Labour Party in the last general election to protect this payment from cuts. Larger families are more at risk from poverty so this is an unjust decision. Other measures that are particularly regressive include:
· Cuts of €543 million from health which will have a devastating effect.
· The decision to increase public transport fares which will again hit people on low and average incomes disproportionately hard.
· The 47% cut in disability allowance for young people with disabilities who cannot find work.”
“I remain 100% committed to the values and principles of the Irish Labour Party. I put forward a number of constructive proposals in advance of the budget that outlined how the Government could increase revenues to narrow the budget deficit as required. I am not prepared to support measures which damage our economic recovery while attacking the weak, the sick, the marginalised and the vulnerable.”