Austerity and solidarity
AT A time of intense economic pressure, social solidarity is a vital component in providing support for the State and its institutions. Dealing with demands for cuts in public expenditure made by the EU-IMF troika in return for necessary funding, the Government must ensure a fair balance is struck in the coming budget. In spite of high unemployment and business and mortgage difficulties, Ireland remains a wealthy country where some sections have largely escaped the effects of recession. It would be wrong if the poorest people were now required to support those who can afford to pay a little more.
As Minister in charge of the largest-spending Government department, Joan Burton will again be required to make significant savings. Some €20 billion was allocated to Social Protection in the last budget, providing for cuts of €475 million across a range of services. Further reductions are now being sought to address the shortfall in Government revenues and to meet EU-IMF demands. Whatever measures are eventually agreed at Cabinet, they must be seen to be both reasonable and equitable.
The Government came in for considerable criticism last year when a number of Ministers engaged in public, pre-budget disputations over where cuts should be made or extra charges imposed. The episode reflected, in part, the archaic structures that surround budgetary issues and the traditional secrecy involved. A subsequent release of budgetary details to the German parliament – in advance of the Dáil – confirmed the need for new procedures. In spite of that, it appears that Ministers have only been advised to confine any budget-related comments to their own departments.
Ms Burton opened a defence of her department’s spending programme in this newspaper by arguing that social transfers provide an important stimulus to the economy and that a reduction in welfare rates is likely to hinder economic recovery. That is not a new idea. Further up the economic ladder, the Irish Congress of Trade Unions has consistently opposed cuts in public service pay on the same grounds. Differences of scale and impact do, however, apply because the great bulk of social transfers would be immediately recycled through the economy.
High unemployment and stagnant domestic growth are the greatest challenges facing the Government. Rather than cut social welfare rates, Ms Burton favours the introduction of more ambitious training schemes for middle and lower-income groups in order to reduce unemployment levels. That said, she admits that savings will have to be made in her department to meet the demands of the troika. It is not a comfortable position to be in, particularly as her colleagues have failed to take action on public sector allowances under the Croke Park agreement and have withheld details of a property tax. Those matters will have a direct impact on the scale of welfare reductions required. Ms Bruton argues in favour of social transfers on economic grounds. Damage to social solidarity caused by patently unfair cutbacks would be of greater significance.