19 November 2009 Edition
Sinn Féin Pre-Budget Submission...
Fairer, viable alternative to Government slash and burn policies
SPEAKING at the launch of Sinn Féin’s Pre-Budget 2010 Submission on Monday, 16 November, Sinn Féin Dáil leader Caoimhghín Ó Caoláin TD said the party is setting out costed proposals that will assist those in need, protect public services and reduce the deficit by targeting under-taxed wealth and stimulating the economy.
Describing the Sinn Féin proposals as “a real alternative to the disastrous, deflationary and grossly inequitable Government strategy”, Ó Caoláin said:
“Sinn Féin today presents our Pre-Budget 2010 Submission as a real alternative road to recovery.
“We have shown with our carefully considered and costed proposals that it is possible to raise the finance needed to maintain frontline public services, protect those in need, reduce the deficit in state finances and provide an economic stimulus package to create jobs.
“For most of 2009, the Government has been attempting to soften up the public for a savage Budget this December. Never has a Budget been more dreaded.
“The Government has made clear that it will base its Budget on cuts in social welfare payments, cuts in public services, and cuts in public sector pay as well as axing health, education and capital building projects.
“Once again, the poor, the unemployed, the pensioners, the low-paid workers – in both the private and public sectors – and families struggling with massive mortgages will bear the burden.
“With social welfare cuts it seems that the Government is determined to get blood from the stone. But when they are challenged to tax the super-rich we are told there isn’t even a stone!
“People are fighting back against the disastrous policies of the Fianna Fáil/Green Government and we welcome that. The past few months has seen people on the streets in unprecedented numbers in demonstrations, strikes and other forms of protest. They demand a better, fairer way. This submission is Sinn Féin’s contribution to that better way forward.
“It is not enough to denounce wrong Government policies – and they are wrong. It is not enough to point out that those policies pursued over the past decade are the cause of the Irish recession – and they are. We also have to set out viable alternatives and that is what we do with this submission.
“Central to our submission is the need for economic stimulus to protect and create jobs. Talk of the beginnings of any type of recovery is meaningless when we have well over 400,000 unemployed in this state, half a million in Ireland as a whole. Already, growing emigration is beginning to disguise the true level of unemployment. So we need strategies to create jobs, strategies glaringly absent from this Government.
“We are proposing a €3.218 billion economic stimulus package with a range of measures to get Ireland back to work. We are also proposing a €723 million household stimulus package aimed at helping to reduce the cost of living in this state.
“As a people we need economic policies that are founded on fairness and that are viable. They also need to instil confidence.
“Sinn Féin is confident that the Irish people can emerge from this economic crisis and that we can build a fairer society and more sustainable economy.”
Also speaking at the launch, party Finance spokesperson Arthur Morgan TD said there is a fairer and viable alternative to the Government’s slash and burn approach to tackling the economic crisis.
“Government proposals to cut social welfare and public services will not lead to recovery but will push this economy deeper into recession.
“This is the course that the Government has followed for the past 14 months. Every measure they have introduced has further shrunk the economy.
“Evidence of this can be found in the pre-Budget outlook which refers back to projections made at the time of the Supplementary Budget last April regarding the deficit estimated for December 2010. This figure of almost €20 billion now appears to be closer to €22 billion.
“Over the course of seven months, tax receipts have fallen by €2 billion – a direct result of cutting spending and targeting tax increases at the low paid.
“There is a fairer and viable alternative to the Government’s slash and burn approach. We must invest in jobs and protect public services and social welfare – to protect citizens, not bank managers and the wealthy.
“Our Pre-Budget Submission demonstrates where money can be raised for both a stimulus and a deficit reducing measure to keep international lenders happy. Our proposals for raising revenue include:–
- Standardising discretionary tax reliefs, raising €1.1 billion;
- Introducing a third tax rate of 48% on income over €100,000, raising €355 million;
- Placing a 1% wealth tax on assets over €1 million, excluding farmland, raising €1.6 billion; and
- Capping all public service salaries at €100,000, raising €450 million.
“Our proposals for a stimulus package include a €600 million jobs retention fund, a cut in excise duty over the Christmas period and a cost of living reduction package for households.
“Sinn Féin does not want a high tax economy; we want a fair tax economy. Dealing with the shortfall in revenue must begin by increasing taxes for those who can afford it and reducing wages of higher-grade public sector workers.
“Sinn Féin’s Pre-Budget Submission throws down the gauntlet to the government. Their choices now will either put us on the road to recovery or deeper into recession.”
Sinn Féin Social and Family Affairs spokesperson Aengus Ó Snodaigh TD said cuts to social welfare were not merely unjust but also the least likely way to reduce the budget deficit and would in fact push the economy further into recession.
The Dublin South Central TD said:
“The mantra from the Government that social welfare is too high and is the first point of call for cuts in this budget is shameful. Is there any member of Government who could survive on €204 per week? That is the figure they believe it is acceptable to cut.
“Sinn Féin has proposed ways to raise sufficient money to both stimulate the economy and contribute to closing the deficit without touching a cent of social welfare. We have also found funds to reintroduce the Christmas bonus, putting us a step ahead of other parties who have called for its return but have not set out financial proposals to pay for it.
“Government proposals to slash social welfare are not merely unjust but they will further contract the economy. We are reliant on indirect taxation because of this government’s destruction of the tax system. Cutting social welfare will immediately be felt in VAT and other receipts. The fall in consumption will also hit more jobs in the retail sector.
“The first step to stop the rising social welfare bill is intervention to retain and create jobs. Safeguarding existing jobs and taking people off dole queues would increase the tax-take and reduce the social welfare bill.
“This Government’s blind ideological adherence to a misguided economic agenda aimed at punishing the least-well-off and most vulnerable sectors of society is not just morally bankrupt, it is driving this state deeper into recession.”
Government would rather take from children and elderly than high-earners
IN THE Dáil on Tuesday, during a special debate on the pre-Budget outlook and having outlined Sinn Féin’s proposals, party Finance spokeperson Arthur Morgan TD launched a scathing attack on the Government’s approach.
Morgan said the Government’s pre-Budget outlook, published last week, was laughable in its poor analysis of the current crisis and the solutions.
“The Special Purpose Vehicle set up for NAMA to keep the €54 billion that the state is going to have to borrow off the books is one of the greatest con jobs I have ever witnessed.
“The mantra from Government ministers is that this state cannot continue to borrow in the region of €500 million a week when, in one year, NAMA could end up costing the state €1 billion euro a week. It’s is one hell of a sleight of hand.
“Repeating the myth that the problems caused by the banking system are separate from the public finances does not make it true, Minister. And people will see it is not true when they are faced with a huge debt service because money was borrowed to keep bank managers, shareholders and developers happy, and not for public services like hospitals and schools.”
The Sinn Féin TD said that the Government seems to think restoring economic competitiveness can only be achieved by slashing wages and public spending. He said its inaccuracy in forecasting the figures for public finances hardly inspired confidence among international lenders and asked how the Government’s alleged ‘income policy’ applies to Health Service Executive Chief Executive Brendan Drumm or to the Taoiseach.
“Are we to believe that, after you’ve slashed social welfare, pensions and child benefit, put a charge on medical cards and cut the pay of people on €30-odd-grand or less, that you won’t do anything else?”
He said the Government is focused on expenditure despite the fact that the state has among the lowest public spending to GDP ratio in the EU, a Third World health service and overcrowded classrooms.
wrong time and time again
He said the Government has been wrong time and time again.
“Not one financial measure introduced over the last 12 months has brought us closer to recovery. It has driven us further into recession.
“From the October Budget – which increased VAT despite the state already being over-dependent on consumption taxes, contributing to the collapse in those taxes – to January – when it took money out of the lower and middle income earners’ pockets, lowering their disposable income – to April – when it doubled levies, brought some of the lowest paid into the tax net and cancelled Christmas for people on the brink of poverty, the Government has taken from the economy where it makes no sense to take – the bottom and the middle. It has left the top relatively untouched, yet it claims there is no more room for taxation.”
Sinn Féin, Morgan said, challenges the Government’s assertion in its pre-Budget outlook that expenditure cuts are more effective than raising taxation measures to close a deficit, “an assertion backed up by the disreputable IMF and that bastion of democracy, the EU Commission”. He said:
“The Right will always seek, and it will always find, other creatures within its ranks to back up its biased view of the world and the Government has done it well this year. We argue that expenditure cuts in this Budget won’t bring about recovery. They will bring about poverty, irreversible damage and more cuts next year, and the year after, until the Government breaks its cycle of slash and burn economics.
“The deficit is a result of our economic woes, not the cause of them, and only a stimulus package for the economy will create the momentum for recovery that will ultimately bring the deficit under control. To pay for that stimulus and to bring much-needed funds into the state’s coffers, the only option available to this Government is to raise money from those who can afford it.”
Reminding Finance Minister Brian Lenihan of his infamous words in October 2008 about patriotism and how it is necessary in these economic times, the Sinn Féin TD said:
“You asked for patriotism from the lowest-paid, those who could least afford to contribute. I am asking you now, Minister, to show patriotism. This is a great land. We are a great people. We are masters at triumphing through adversity and punching well above our weight. We can achieve success again but it must be a fairer success this time, not one that benefits the few and not the many.
“To get there, your start must be fair. What you are planning in December is not fair, Minister. It is not just. Our proposals are and we urge you to adopt them.”
Fine Gael and Labour challenged to support proposals
SPEAKING before the Dáil debate, Arthur Morgan challenged Fine Gael and Labour to support Sinn Féin’s approach to the Budget in the absence of any proposals of their own.
“We welcome the opportunity to present again our pre-Budget proposals, this time in the Dáil and to the Government. The silence from the other parties in terms of their proposals has been deafening.
“I am challenging Fine Gael and Labour, in the absence of their own proposals, to support some of ours.
“In particular, I would like to see them support the wealth tax and the proposal to cap public servants’ pay. The latter in particular is very timely when we look at the obscene salaries being paid in this state both in the public and private sector, as evidenced by the revelations about the proposed head of AIB’s salary today.
“Both Fine Gael and Labour have reacted against several of the Government’s proposals and I consider it essential that we in Opposition not only oppose the Government’s plans for this Budget but also present viable alternatives. Our pre-Budget proposals raise the money to not only reduce the deficit but also pay for a stimulus and we would welcome Fine Gael’s and Labour’s support for our proposals, the only ones presented and costed by an Opposition party.”
At the launch: Sinn Féin TDs Aengus Ó Snodaigh, Caoimhghín Ó Caoláin and Arthur Morgan