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Budget was cobbled together by economic illiterates – Ó Caoláin

10 December, 2009 - by Caoimhghín Ó Caoláin TD


Speaking in the Dáíl today on Budget 2010 Sinn Féin Dáil Leader Caoimhghín Ó Caoláin said the budget was cobbled together by economic illiterates. He described Brian Lenihan’s speech as “one of the greatest examples of self delusion we have ever had to listen to.”

Deputy Ó Caoláin said:

“Last night the gulf between Government TDs and those who elected them grew wider than ever before.

“The people of Ireland looked on with horror as the members of Fianna Fáil and the Green Party applauded a savage budget, a budget that attacks the poor, the low-paid and the medium income earners. It was a budget cobbled together by economic illiterates.

“Minister Lenihan’s speech must rank as one of the greatest examples of self-delusion we have ever had to listen to. Either that or he is deeply cynical. Certainly he is trying to delude the Irish people.

“The Fianna Fáil backbenchers are the greatest shower of hypocrites that ever sat on those benches. Their only hope now is to try to hang together and pray they are not plunged into an early general election when many of them may hang separately.

“The sheep will be driven willingly through the voting lobbies tomorrow. Then at the weekend they will go home and bleat to their constituents that they had no choice, that there was no other way, that the public purse was empty and we all have to bear the pain. Shame on them all and shame on their pathetic followers in the Green Party.

“Sinn Féin’s proposals are not for resting on a shelf. They are campaigning proposals and we will advance them in the months ahead. We welcome the fact that people are fighting back against the disastrous policies of this Fianna Fáil/Green Government. People have been on the streets in the past year in unprecedented numbers in demonstrations, strikes and other forms of protest.

“We need economic policies founded on fairness and with the ability to succeed in providing a decent livelihood and decent public services for all. Such policies 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 sustainable economy.

“To do that we must reject the policies on which this Budget is based and get rid of the politically bankrupt Government which produced it. We demand a better, fairer way. We say to this Government get out of office and give the people back our country and our economy.” ENDS

Full text of Deputy Ó Caoláin’s speech follows:

Budget Statements 10/12/09

Caoimhghín Ó Caoláin TD
Sinn Fein Dáil Leader

Last night the gulf between Government TDs and those who elected them grew wider than ever before.

The people of Ireland looked on with horror as the members of Fianna Fáil and the Green Party applauded a savage budget, a budget that attacks the poor, the low-paid and the medium income earners. It was a budget cobbled together by economic illiterates.

Minister Lenihan’s speech must rank as one of the greatest examples of self-delusion we have ever had to listen to. Either that or he is deeply cynical. Certainly he is trying to delude the Irish people.

He told us we are “on the road to economic recovery”! Who does he think he’s kidding?

Like a First World War general Minister Lenihan told us the worst is over and that this is “the last big push”. I was expecting him to say it will all be over by Christmas. If it’s the last big push we know who he’s sending over the top – the low paid workers and their families, the social welfare recipients, the carers and the young unemployed.

The Fianna Fáil backbenchers last week staged a mock revolt over the talks with the public service unions. But there will be no revolt when they troop through the lobbies tomorrow to support cuts to the welfare payments of the most vulnerable sections of our society.

The Fianna Fáil backbenchers are the greatest shower of hypocrites that ever sat on those benches. Their only hope now is to try to hang together and pray they are not plunged into an early general election when many of them may hang separately.

The sheep will be driven willingly through the voting lobbies tomorrow. Then at the weekend they will go home and bleat to their constituents that they had no choice, that there was no other way, that the public purse was empty and we all have to bear the pain.

Shame on them all and shame on their pathetic followers in the Green Party.

Shame on them for what they are doing to those who depend on social welfare. They have cut a swathe through social welfare benefit schemes and assistance schemes. Jobseekers Allowance, Farm Assist, Pre-Retirement, Supplementary Welfare Allowance – all cut. Widow and Widower’s pensions cut. Deserted Wife’s Benefit Allowance cut. One-Parent Family Payment cut. Disablement Pension and Invalidity Pension cut as well as the Disability Allowance and Blind Pension.

Quite disgracefully and inexcusably this Budget cuts both carer’s benefit and carer’s allowance. They are taking €8.20 and €8.50 respectively per week out of the pockets of people who are caring for elderly and/or disabled relatives in their homes. People on Disability Allowance are going to lose €8.30 per week.

The person on Carer’s Allowance will be out of pocket by €34 per month or €408 per annum. The Carers’ Association has quite rightly pointed out that carers are the only social welfare recipients who have to work for their payment by providing full time care in the home to elderly, sick and disabled.

It has been estimated that 161,000 family carers provide over 3.7 million hours of unpaid care each week contributing more than €2.5 billion to the Irish economy each year. The 40,883 family carers providing full-time care - more than the 39,000 nurses employed by the HSE - contribute €1.6 billion to the economy.

This cut is the thanks that carers get. And Minister Lenihan claims the over-riding objective of the Budget has been to “strive for fairness”!

Where is the fairness in the savage cuts to social welfare support for young unemployed people?

This Budget cuts Jobseekers Allowance for 20 and 21 year old new applicants from €204 to €100 per week and to €150 per week for those between 22 and 24. This is a further attack on young people who are facing the ordeal of the dole queue. It follows the April Budget’s slashing of Jobseekers’ Allowance for 18 and 19 year olds.

Who are these young people? These are the children who did their Junior Cert between 2001 and 2007 at the height of the Celtic Tiger and their Leaving Cert between 2006 and 2009 as it was coming to an end. They were told they were being educated in a knowledge economy and that if they worked for the best academic results they would reap rich rewards in a State with full employment. But now, thanks to the disastrous policies and gross mismanagement of Fianna Fáil-led governments, they are being thrown on the unemployment scrap-heap.

In the past two years the numbers of young people that are unemployed under the age of 25 has soared by 173%. We have the 2nd highest level of unemployment among 18-24 year old males in Western Europe at 26.5% - more than twice the State unemployment rate of 12.5%

It is 25 years since Thatcher was on the rampage in Britain but here in the Fianna Fáil/Green Budget of 2010 we find Thatcherism alive and well. The Minister tells us the purpose of his cuts to young people’s dole is “to encourage them to stay close to the labour market”. He claims that the experience of the 1980s was that the welfare system “was out of step with labour costs in the rest of the economy” and “trapped people in protracted joblessness”. Well, Minister, that type of Thatcherite thinking was wrong then and it is wrong now. It translates as saying that you shouldn’t pay the jobless any more than the barest subsistence or they won’t want to work. The same mentality is on display in the decision to slash the dole to €150 per week for anyone where “job offers or activation measures have been refused”. What kind of job offers, what kind of activation measures? There can be many legitimate reasons why a person would not take up a particular offer.

But then there was no real recognition in this Budget of the catastrophe of unemployment. There are 423,400 people on the Live Register in this State, an increase of over 146,000 in one year. There has been an increase of 63% in those applying for Jobseekers Allowance since December 2008. But where is the Jobs Strategy in this Budget? There is none. There is a rag bag of mainly training measures amounting to a paltry €136 million. It is an insult.

But let’s be real about this. The Government does not prioritise fighting unemployment because it represents the greedy in our society. And the greedy have always secretly welcomed a high rate of unemployment because it allows them to hold workers to ransom. The message is simple: Accept lower wages and poorer conditions or get out – there are plenty more out there waiting in line.

And what of people who are in work? This Budget attacks low and modest income families by imposing a 5% across-the-board cut in the wages of workers in the public service earning under €30,000 per year and 7.5% on earnings between €30,000 and €70,000. These public service workers, who make up the single largest bloc of public service employees, are amongst those who will be hit the hardest by this Budget.

This Budget crucifies those families on modest incomes. They are now bearing the brunt of pay cuts and the disgraceful cut to Child Benefit. A family with three children loses nearly €50 per month. Many such families have just one pay packet coming into the household and have to meet exorbitant mortgage payments out of that single income.

The cut to Child Benefit is an attack on children and an attack on families. Net childcare costs in this State are 45% of the average wage compared to 16-17% in EU and OECD states. Childcare cost accounts for 30% of family income in this State as against 12.5% in EU and OECD countries. Over the past decade when people called for a real State childcare strategy with proper infrastructure, and places that were affordable and accessible to all who needed them, we were told that we had the most generous Child Benefit system and that this was how childcare would be funded.

Once again it is those families bringing in wages and struggling to make ends meet who will be hit hardest. Their Child Benefit will be cut and if they are above the income threshold they will receive no Family Income Supplement to compensate. It is these same families and others like them who will be hit by the increase in the threshold for the Drugs Payment Scheme, meaning they now have to pay more every month for medicines.

To justify its cuts to pay and social welfare the government claims that the cost of living has gone down but this is not the case for the majority of people, especially for struggling families. This year prices went up for a range of essential items such as electricity, gas, bus fares, childcare, primary education and hospital services.

In her Health Estimates Statement Minister Harney claims that planned reductions in the drugs bill in 2010 will save €141 million in addition to €133 million saved this year. Of course such savings could and should have been made long ago and more savings can be made, through reduction in price and wider use of generic drugs and the establishment of a State wholesale distributor, as Sinn Féin has long advocated. Why then does the Minister choose to target medical card holders with her prescription charge of up to €10 per month? This charge undermines the General Medical Services and Long Term Illness Schemes. Once established it will remain in place to be increased year on year at the expense of those who rely on our public health system.

The Budget has dealt a further blow to that already struggling public health system. The two-tier public private system is hugely costly in terms of inequality and the poorer health outcome it entails and in terms of its inefficiency in using public money to subsidise the private healthcare industry. Privatised healthcare will not be affected by this Budget. It will still be pampered but the public system will continue to deteriorate. This Budget takes €106 million out of current expenditure in the HSE under so-called economies and reduces capital spending by €37 million.

The funding for mental health is too little too late. It is typical of the mismanagement by this Government and the HSE that they have waited until the total collapse of property prices to try to sell the properties of former psychiatric institutions. We have yet to see how much this will realise and when.

With the recruitment embargo still in place, with nurses still in short supply and now going to be paid less, with trolleys and chairs still clogging our hospital corridors, with our primary care system still not properly developed and with hospital services continuing to be centralised we are in for another winter and many more winters of healthcare misery thanks to this Government.

One of the headings under so-called economies for the HSE is transport. In my home County people rely more than ever on HSE-provided transport since the closure of acute services in Monaghan General Hospital and that need will become even greater in the North East with the impending closure of acute services at the Louth County Hospital in Dundalk. Yet we are told that transport is going to be cut. It is an outrage in a region which in recent weeks has seen its already totally inadequate hospital infrastructure further undermined with outbreaks of C Difficile in Our Lady of Lourdes Hospital in Drogheda and Our Lady’s Hospital, Navan, resulting in the closure of scores of beds and the cancellation of operations and procedures.

I have a question for the Minister for Finance and the Minister for Health & Children. Will every TD who votes for social welfare cuts get a 40-bed hospital facility in his or her constituency? Good luck to the people of Kenmare but remember the hospitals across the State who have been closed or have lost or will lose services due to the compliance of backbenchers in the health policies of this Government.

The full extent of the health cutbacks in this Budget will become clear in time and public patients will pay dearly for them.

I spoke earlier of the Government’s oft-repeated claim that we are a knowledge economy. But Minister Lenihan chose not to highlight in his speech the cuts of €200 million to Education in 2010. It is an outrage that 27% has been cut from the budget for building, equipping and furnishing primary schools. Children will continue to be taught in dilapidated buildings and millions will continue to be wasted in rents for so-called temporary pre-fab accommodation.

Earlier this year the Government announced a €150 million programme for installing IT equipment in schools – but only those schools which have been newly developed or renovated. This cosy deal with the IT companies leaves all other schools out of the loop. The money should have been spent on providing school buildings for those who need them most, thus putting in place essential infrastructure and helping to provide employment in the construction sector.

The Government’s claim to be protecting the vulnerable as well as encouraging people to educate themselves out of disadvantage is exposed as a lie when we see the cuts to Student Support Grants, to allowances for VTOS and Youthreach, the removal of grants from recipients of Back to Education Allowance, the 11% cut in alleviation of disadvantage measures to help people access third level and the 62% cut for the same purpose from the Dormant Accounts Fund. And of course teachers’ pay will be cut.
So much for the knowledge economy.

This Budget has been preceded by efforts throughout the past year to divide and conquer public sector and private sector workers. It has been aided, regrettably, by Fine Gael and Labour and by large sections of the media. The acceptance by the so-called main opposition parties of a figure of €1.3 billion for the slashing of public service pay in 2010 was a major victory for the Government. Public service workers were demonised and the stage was set for the stage-managed collapse of the negotiations with the public service unions. The phoney revolt of the Fianna Fáil backbenchers was the trigger for the collapse and the field was clear for the Government to impose the pay cuts. Yes, the highest earners have been hit and rightly so, but the across-the-board 5% cut for low and modest income earners in the public service is wrong.

And, make no mistake, any ordinary workers in the private sector who were misled enough to think that they will benefit from this cut to the incomes of ordinary workers in the public sector are in for a shock. If the Government gets away with this attack on low and modest income earners in the public sector then the private sector will be next for an even worse hit. The next target will be the minimum wage and wages and conditions right across the private sector.
While ordinary workers and families have been hit hard the wealthy have been protected once again. There was no tax reform in this budget. There should have been a new third and top rate of tax at 48% for income in excess of €100,000 which would have raised €355 million. Standardising all discretionary tax relief would have raised €1.1 billion.
The Government has tried to convince us that the wealthy are now over-taxed. But in 2007 the top 5% of households in this State held €320 billion in assets. That did not all vanish into thin air with the property price collapse. In 2008 1,447 people or 0.6% of all earners, took in approximately €3.459 billion between them. And, most tellingly of all, more than 25% of the top 400 earners paid tax at a rate of less than 20%.

The price of not introducing a wealth tax for the few is misery for many.


But there were some tax changes. The carbon tax has been brought in as a revenue raising measure that once again will hit those least able to afford it, which is why Sinn Féin voted against it last night. And we have been threatened with water charges. The Minister announced a metering system for every household in the State but he did not say how much this will cost before a cent is raised in water charges. The cost will no doubt be huge and instead of wasting this money on metering and charging for a basic necessity, the Government should spend it on improving our water infrastructure and reducing the massive waste of water in the system.

The 21.5% VAT rate was reduced but by not nearly enough and should never have been increased in the last Budget. The alcohol excise measures should help restore some balance in trade along the badly hit Border towns. But this should be seen as a temporary expedient only. Much more needs to be done to help revive the economy of the Border region – and I mean on both sides of the Border. The only real solution will be tax and currency harmonisation on this island.

The real background to this Budget, the herd of elephants in the room, is the €54 billion of the people’s money poured into NAMA to bail out banks and developers and to indebt future generations. The Government’s claim of needing to take €4 billion out of the economy to close the deficit and show fiscal prudence is a total contradiction when set against the €54 billion wasted in NAMA. Those young people not forced to emigrate by this Government will have to bear the burden of NAMA for years to come. NAMA and this Budget, and further Budgets ahead of us, are the legacy of the golden circle of conservative politicians, corrupt bankers and insatiable developers who have wrecked the Irish economy. And it is the most vulnerable who are being forced to pay.

Minister Lenihan and the Taoiseach have tried to put a positive spin on this disgraceful Budget. Unbelievably, Minister Lenihan invoked the community spirit of the people who rallied to the aid of those hit by the recent catastrophic flooding. He has some neck given the lack of urgency in the Government response to the flooding, the inadequate funding made available to deal with the aftermath, and above all, the fact that Government neglect left people across the country vulnerable to flooding in the first place.

Also invoked by Minister Lenihan was the ancestry of the Kennedy family in Co. Wexford. This was appropriate but not in the way Minister Lenihan intended. His Budget and his Government’s policies are a recipe for the mass emigration of unemployed Irish youth. Last year he charged them €10 per head to leave the country. This year he is making damn sure that Ireland is a cold house for jobless young people and that the door is wide open for them to get out.

There was and is an alternative to this disastrous Budget. Sinn Féin presented that alternative in our Pre-Budget Submission ‘The Road to Recovery.’ Central to that alternative is the provision of stimulus to the economy so that recovery can come about in the only way possible – the provision of jobs. We proposed a €3.218 billion economic stimulus package with a range of measures to get Ireland back to work. We proposed measures and savings amounting to €7.623 billion which protected those on low and modest incomes, social welfare recipients and public services. In contrast this anti-jobs Budget will depress the Irish economy and worsen our economic woes.

Our proposals are not for resting on a shelf. They are campaigning proposals and we will advance them in the months ahead. We welcome the fact that people are fighting back against the disastrous policies of this Fianna Fáil/Green Government. People have been on the streets in the past year in unprecedented numbers in demonstrations, strikes and other forms of protest.

We need economic policies founded on fairness and with the ability to succeed in providing a decent livelihood and decent public services for all.

Such policies 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 sustainable economy.

To do that we must reject the policies on which this Budget is based and get rid of the politically bankrupt Government which produced it.

We demand a better, fairer way.

We say to this Government: “Get out of office and give the people back our country and our economy.”

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