Posted by: Team Joan | December 6, 2011

Budget 2012 Death by a thousand cuts.

This is a mean and cruel budget. Once again, it is those on low to middle incomes, and the poor who will take the biggest hit, people who bear no responsibility for the economic crisis caused by the greed of a wealthy elite.

The promise by the government, and especially Labour, to protect the most vulnerable, is exactly that, another broken, empty promise. Not a single group among the poor or those who are struggling to make ends meet has escaped this government’s hatchet job. The list of cuts is endless, Child Benefit is cut for the third and fourth and subsequent child, Fuel Allowance is cut by six weeks, the Back to School Clothing and Footwear Allowance is cut, and the age limit for the youngest child in one parent families is to be reduced to 7 years starting next year.

Part time workers will be hit by the reduction of Jobseekers Benefit to five days and the inclusion of Sunday working in assessing claims. Despite claims to protect old age pensioners, the State Pension will be lower in future for people who have less than 48 stamps per year, and for the Widows/er’s Pension the necessary number of stamps goes from 156 to 520 from 2013.

But the most cruel and despicable cut is for young people with disabilities. New claimants between 18 and 21 will be cut from €188 a week to €100, and for 22 to 24 year olds, from €188 to €144.

The claim that basic rates are not being cut is not true. Inflation is expected to be 2% next year, taking account of the rise in VAT. If inflation goes up by 2% and your income stays the same, you are facing a 2% cut.

On top of these cuts in welfare are the cuts in health, education and community services. Just at a time when there is a rise in poverty, inequality and disadvantage, and associated poor health, the very services people rely on and are supposedly targeted to tackle social exclusion and increase educational opportunity   are being cut to the bone.

On top of all this we now face a Household Tax of €100 in January. This will apply to all households except social housing. Along with cuts in Rent Supplement and Mortgage Interest Relief, this will put many households to the pin of their collar. The rise in VAT to 23% will hit those on low incomes the hardest and will of course further cut demand and cost jobs.

All of this pain is in vain. We cannot solve the economic crisis by piling austerity upon austerity. Some €20 billion has been taken out of the economy in the last four years and yet the underlying deficit has only reduced by less that 2%. Tax revenues have fallen, welfare spending is rising as more and more people lose their jobs and the domestic economy is in depression as demand has collapsed by 25%.

The United Left Alliance has posed a realistic and workable alternative to this madness. We reject the propaganda of right wing commentators and politicians that the problem is high welfare and social spending, along with high wages in the public sector. Welfare and social spending in Ireland is not high in comparison to other EU states. It is barely adequate for a civilised modern society.

We are for capping pay in the public sector at €100,000 a year, while understanding that the vast majority are on low to moderate incomes. The problem has been caused by the neo liberal ideology of tax cuts (which mostly benefitted the very well off) and transferring the private debts of banks onto the state. These policies need to be reversed.

The wealth of the elite has not been burnt in the crisis. It has in fact increased. The assets of Ireland’s top 5% could be as high as €219 billion in 2010. A 5% assets tax could raise €10 billion a year. This is wealth which is being hoarded and not spent or invested in the economy. Taxing it would allow us to reverse the cuts in welfare, health, education and community services and abolish the USC. This would give money to people who would actually spend it in the economy, giving domestic demand and jobs a much needed boost.

This is dismissed as unrealistic, as fantasy land by all those who claim to know better. That is, the people who got us into this mess in the first place. Meanwhile we head towards oblivion, death by a thousand cuts. We have to have radical change and the sooner the better.

Joan Collins TD.

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