2 December 1999 Edition
McCreevy's cake and crumbs
BY ROBBIE MacGABHANN
Tax cuts for the low paid
Social welfare payments
Hospital waiting lists
Hats off to Charlie McCreevy and Michael Noonan. They win the week's award for having the hardest political necks. Fianna Fáil Finance minister Charlie McCreevy introduced a budget where he spoke of the need for ``a new vision and strategy of the future'' and then delivered the same old package of good news for the privileged and empty promises for the rest.
Michael Noonan was a born again social justice proponent, conveniently forgetting that when Fine Gael were in government in the 1990s, there was little difference between the budgets they introduced and McCreevy's.
Like other Finance ministers over the last six years, McCreevy outlined the now familiar budgetary objectives of sustaining growth, reducing taxes and promoting a fairer society.
McCreevy even pointed up the more glaring inequalities in Irish society, citing the increased costs of childcare and house prices. He then proceeded to introduce a budget that clearly favoured those who have well paid work and have a spouse also working.
If you were a low paid worker or unemployed, the budget was a non event. Unemployment payments will increase by only £4 per week. If you're a pensioner, there was slightly better news, but still only marginally better. If you are unemployed with dependent children, the budget was a big disappointment, as the increases in child benefit of £8 per child were still way below an acceptable level to actually provide your children with a level playing pitch in terms of their future development.
The Dublin Government's budget was a piecemeal package with a sliver of increases for child care facilities, for hospital waiting lists, carers and even £1.5 million to cover the initial costs of 26-County membership of Partnership for Peace.
The centrepiece of the budget and of the Fianna Fáil/Progressive Democrats coalition, was the proposed £900 million plus in tax cuts. The top rate of tax will be cut by 2% to 44%. The standard rate of tax was also cut by 2% to 22%. The other major change introduced by McCreevy was an extension of the standard rate tax band from £14,000 to £17,000, taking thousands of people off the top tax rate. McCreevy also introduced tax changes that favour couples where both partners are working.
This all adds up to impressive tax cuts if you are a middle to high income earner. Most other groups came out with only a marginally different financial situation than they began with.
In short, the budget was a failure. Charlie McCreevy failed to deliver the necessary increases in child benefit to really tackle child poverty. Sinn Féin TD Caoimhghín O Caoláin amplified this, saying: ``A really substantial increase in child benefit has not happened.''
The £46 million earmarked for funding childcare facilities and the tax relief for building new crèches has to be welcomed, but it falls way short of the massive infrastructural investment needed. McCreevy mentioned the £40 billion National Development Plan on several occasions during his speech. The plan proposes to spending a mere £250 million on childcare facilities.
This is the theme throughout McCreevy's budget, piecemeal offerings and lip service to the real social problems challenging society and big pay off to those who are already enjoying the benefits of economic growth and increasing wealth.
McCreevy's justification of his 1997 cut in capital gains tax was tangible proof that he has absolutely no intention of ever moving to a just taxation system in the 26 Counties. There was not even the slightest hint that the Finance Bill which must accompany this budget will deal with tax evasion and avoidance.
It has become a cliché to say that a budget was a missed opportunity. Budget 2000 was not a missed opportunity. It was a spurned one. McCreevy has billions to spend imaginatively, creatively and justly. He failed on all counts.
No new vision in Budget 2000
Finance Minister McCreevy's Budget contains no new vision and falls far short of the widespread expectation that the biggest Exchequer surplus in the history of the State would be used to take a major step from inequality to equality in Irish society. This was the response of Sinn Féin TD Caoimhghín Ó Caoláin to the third Budget from the Fianna Fáil/Progressive Democrats government.
Giving his initial response to the Budget 2000 details announced on Wednesday, Ó Caoláin said:
``Minister McCreevy told us in his speech that he was setting a new vision and a new strategy for the future. The measures he announced belied that claim. Given the size of the massive budget surplus in his coffers, there was a distinct lack of vision and a lack of strategy to use that wealth to build a more equitable society. The Budget will prove a deep disappointment to those who believed that this government would use the opportunity to create fundamental and lasting change and move from inequality to equality in Irish society.
``There have been some positive changes in the tax system to take the lower paid out of the net. However tax reductions for those on lower income do not go far enough. Instead of concentrating the tax reductions on this area Minister McCreevy has spread the reductions across the board, trying to please all sectors and once again failing to narrow the gap between the higher and lower earners.
``The Minister cited the National Anti-Poverty Strategy in relation to his social welfare increases. The NAPS says that welfare ``must provide sufficient income for all those concerned to move out of poverty and to live in a manner compatible with human dignity''. The Budget once again fails to meet this criterion. A budget of vision would have linked welfare payments to average incomes. Sinn FÇin was among those who argued that social welfare payments should be set at 50% of average incomes.
``The £4 per week increases are therefore inadequate given the massive resources available.
``The Budget is a failure in terms of Childcare. While the funds to increase childcare places are welcome the key measure needed - a really substantial increase in Child Benefit - has not happened. An increase of £20 per child per month as sought by Sinn Féin in our Budget submission would have really assisted people with their childcare needs. And having made much of bringing social welfare increases forward to May 2000 it is disgraceful that Child Benefit increases will not come in until September 2000.
``One of the glaring omissions in this Budget is its failure to address the Housing Crisis. There are no imaginative tax measures to free up housing, such as the Capital Gains Tax increases proposed by Sinn Féin to curb property speculation. Instead we have the continuation of piecemeal measures with local authorities starved of the funding to accommodate those on our massive housing waiting lists.
``This Budget is very disappointing for people with disabilities. A paltry £5.35 million is included under the heading of Social Inclusion. The welcome funding of the Vantastic service in Dublin underlines the lack of such provision elsewhere. There is nothing whatever towards the provision of Personal Assistants for people with disabilities. A budget of vision would have established an Independent Living Fund.
``The Minister has failed to provide the necessary substantial increase in the Carer's Allowance and the new measures announced offer meagre redress.
``There is little in this Budget to benefit the most hard-pressed of the farming sector. I point in particular to the failure to provide any special measure to assist the pig producers of the Border region. Unless immediate action is taken many more of them face being driven from the industry altogether.''