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25 July 2002 Edition

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Death by a thousand cuts

McCreevy's dirty dozen set to return



BY ROBBIE MacGABHANN


What do you think is the best way of describing the 26 Counties? Is it one of the most badly run states in Europe or just the most unequal. Both these definitions hold up this week as domestically and internationally the Dublin government has been shown as incompetent in how it manages resources and unequal in how it distributes them.

Most damning is a UN Human Development Report published this week that shows the 26 Counties as having the highest level of poverty and the most unequal society in the industrialised world next to the USA.

This doesn't seem to bother the Dublin government and in particular finance minister Charlie McCreevy, who is demanding other ministers cut over €100 million from their budgets as the ESB, VHI, third level fees and accident and emergency charges are all increasing. 800 new jobs in the health sector will not be filled as part of McCreevy's spending freeze.

A new rake of road tolls are set to be introduced too, as transport minister Seamus Brennan seeks to make up a €500 million shortfall in road funding finances.

So why are we facing all these cutbacks? It could be just something to the with the fact that in the first six months of 2002, government spending increased by 21%.

Yes, you could be forgiven for drawing the conclusion that Fianna Fáil and the Progressive Democrats spent the pre-election months trying to buy their way back into power. Now we are paying the costs, as each of these cutbacks and spending increases will leave every household in the 26 Counties with less money at the end of the week.

For the households who didn't have much money to start with, this is clearly going to be a problem over time. However we didn't get to be a society with such inequalities between the rich and poor by accident. Haven't we been here before?

Just over a decade ago, the 26 Counties was run by a Fianna Fáil/Progressive Democrat coalition grappling and failing to deal with an economy in recession.

Faced with record numbers employed, over 300,000 at one stage, the then social welfare minister Charlie McCreevy took action. He did not seek radical methods of investing in the resources needed to ensure families did not fall into absolute poverty and deprivation. No, he just began a series of small but significant cuts in social welfare spending, twelve in all.

The net effect was a serious reduction in resources for the weakest in society. In some cases, despite the past decade of huge wealth and profitability, some of the McCreevy cutbacks were never rescinded.

So it should not come as a surprise to find that poverty and inequality are such a feature of Irish society. The UN Human Development report found that 15.3% of 26 County citizens are living in poverty; 23% are functionally illiterate.

Also interesting was the finding that average wealth in the 26 Counties was $29,866 per annum. Today this would be worth just over €30,000. This is in stark contrast to the experience of the 62% of 26-County adults who earn less than €25,396, the average private sector wage. 33% of workers earned less than €12,690, what a person on the minimum wage working a 40-hour week would earn annually. The UN report confirms these figures by concluding that the richest 10% of Irish society is 11 times wealthier than the poorest 10%.

Figures released by the ESRI earlier this year showed that budget giveaways and tax cuts over the past five years massively favoured the wealthier in Irish society.

It must also be recognised that budget cutbacks affect the poor far more deeply than they do the well off. When you add in the effects of rising house prices, the costs of euro changeover inflation, VHI and electricity price rises as well as more money to be paid on hospital visits and medical prescriptions, it is clear that low income households will suffer most.


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