Budget draws mixed response

The supplementary Budget unveiled today by the Minister for Finance in the Dáil has drawn a mixed reaction from trade unions and other organisations.

The head of the Siptu trade union said Brian Lenihan's Budget formed no basis for social solidarity.

“This Budget has all the hallmarks of a centre right response to the crisis”, general president Jack O’Connor said today. “It represents the socialisation of the toxic debt accumulated by the banks through reckless lending, and contrasts sharply with the imposition of the 2 per cent levy and the doubling of the health levies on middle and lower income families.

"Workers who are now losing their jobs see no tangible measures in this Budget for job maintenance, while having to face reduced social welfare payments as well," he said.

The Unite union dismissed Budget as doing nothing to address job losses. Unite also called for a general election so that alternative and better options can be put to the people.

"This Government is seeking to escape recession through taking money out of the economy," said Unite regional secretary Jimmy Kelly. "It has never worked in any economy and it will not work here. Saving and creating jobs is the only way to work this out.

"We need stimulus. This budget will only bring stagnation. The current government has failed in its responsibility to the people. The people now need the opportunity to change the government," Mr Kelly said.

The Irish Organisation for the Unemployed welcomed the retention of the basic adult social welfare rate, but said

the abolition of the Christmas bonus was "a bitter bill to swallow at a very expensive time of year". It said the proposed reduction of rent supplement was "particularly worrying" and also expressed concern at the halving of jobseekers' payments to young people under 20.

The Construction Industry Federation (CIF) accused the Government of dismantling the Public Capital Programme and rowing back on commitments to prioritise infrastructure improvements as a means of growing the economy.

The organisation also dismissed any suggestion that the capital investment programme in its current guise can act as a stimulus for the Irish economy.

CIF director General Tom Parlon said: “Public infrastructure spending has become a vital part of the construction industry and the economy over the past 10 years. The Government is now winding down this spending with the inevitable effect of depressing rather than stimulating the economy."

However, Ibec has welcomed the Budget. Turlough O’Sullivan, director general of Ibec, said: “Business considers that this Budget is a credible response to the current difficulties in the public finances.

"It sends a clear and positive signal that the Irish Government is taking effective remedial action over the next five years. Ibec would have preferred a greater emphasis on cutting current expenditure immediately rather than on increasing taxation," he said.

“Unpleasant though it is for all of us, the increases in income levies announced today are the most effective means of raising revenue with the urgency and simplicity required.

“On balance, Ibec supports the establishment of a national asset management agency and believes that this measure will further stabilise the banking sector and will help re-establish lending to businesses and households."

The Irish Small & Medium Enterprises Association (Isme) described the Budget as "savage and a missed opportunity" that would do nothing to stimulate enterprise or assist in maintaining employment.

Isme said Mr Lenihan "bottled it" and "utterly failed" to address current expenditure, in particular the public sector element.

"With tax revenues now at 2002 levels, there was scope to once and for all address the cost of the public sector and in particular the pay element. The Minister took the easy and wrong option, by once again delaying decisions on this huge element of current expenditure," Isme said.

It described the early retirement and career break initiatives as "cosmetic" steps that would have little impact in reducing the significant cost of the public sector.

Dóchas, the Irish Association of Non-Governmental Development Organisations, criticised aid cuts contained in the Budget.

"The Irish overseas aid budget was cut by €45 million in July 2008, another €15 million in October, and by €95 million in February this year. Today’s announcement takes another €100 off the Budget," a statement from the agencies said.

Elsewhere, the Drinks Industry Group of Ireland has welcomed the lack of increase in alcohol taxes. The Irish Hotels Federation (IHF) said the Budget provided a "roadmap to bring the country’s public finances under control and restore confidence in the economy".