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Budget is “recipe for worsening recession and deeper depression”

8 April, 2009 - by Caoimhghín Ó Caoláin TD


Public health services "facing disaster" – Ó Caoláin

Sinn Féin Dáil leader Caoimhghín Ó Caolain has described the Budget as "a recipe for worsening recession and deeper depression". He said that it contained no jobs strategy, cruelly cut social welfare and would lead to more small businesses going to the wall. He said that as a result of cuts the public health services are now facing disaster.

Deputy Ó Caoláin said:

"This Budget should have been about job retention and job creation. Instead we have no jobs strategy and an assault on young unemployed people.

"The Budget does nothing to stimulate the economy. There is no support for the small and medium size enterprises that are going to the wall every day. Instead it takes the last euros from the pockets of their customers and condemns them to commercial death.

"Our public health services, already badly affected by cuts since autumn 2007, are facing nothing short of disaster. But the Minister for Health Mary Harney, like the Queen of Hearts in Alice in Wonderland, makes words mean exactly what she, and only she, wants them to mean. She issued a statement yesterday saying her main aim was to maintain services to patients while services to patients are being reduced or removed altogether.

"The Government has placed an embargo on the filling of almost all posts in the public health service. In addition it is expected that contracts for up to 1400 workers in the health services will not be renewed. This is a recipe for disaster in our public health services.

"HSE senior management have indicated that they were not consulted prior to the Government’s announcement of the embargo on 26 March but are required to implement the Government decision. The Irish Nurses Organisation and SIPTU have already indicated to the HSE that it will not be possible to run the public health service in the context of the recruitment embargo as announced by Government.

"It is a Budget full of deep cuts to public services, especially in childcare and education, that will have damaging consequences for years to come.

"The Government has claimed that social welfare cuts were largely avoided in this Budget. That is not the case.

"Jobseekers Allowance for young unemployed peopled under 20 is to be slashed by half to €100. This is nothing but a savage cut to take money out of the pockets of young unemployed people and it was sickening to hear Minister Lenihan trying to disguise it by saying that it was ‘to incentivise the young unemployed to participate in training programmes’. It is nothing of the sort. It is Government encouragement for some to emigrate and for most to exist on a pittance and to struggle for scarce places in education and training.

"The ending of the Christmas social welfare bonus will hit the most vulnerable of families. It is tantamount to cancelling Santa Claus for the children of the poorest families in our society, forcing some parents into the hands of money-lenders in order to give their child or children some semblance of Christmas cheer. Shame on the authors of this proposal and shame on this Government for adopting such a cruel and heartless measure." ENDS

Full text follows:

Far from saving the nation this Budget is a recipe for worsening recession and deeper depression.

The Government of Fianna Fáil and the Green Party have imposed a savage Budget that attacks low and middle income earners, the unemployed and others dependent on social welfare.

This Budget should have been about job retention and job creation. Instead we have no jobs strategy and an assault on young unemployed people.

The Budget does nothing to stimulate the economy. There is no support for the small and medium size enterprises that are going to the wall every day. Instead it takes the last euros from the pockets of their customers and condemns them to commercial death.

It is a Budget full of deep cuts to public services, especially in childcare and education, that will have damaging consequences for years to come.

The Government has claimed that social welfare cuts were largely avoided in this Budget. That is not the case.

Jobseekers Allowance for young unemployed peopled under 20 is to be slashed by half to €100. This is nothing but a savage cut to take money out of the pockets of young unemployed people and it was sickening to hear Minister Lenihan trying to disguise it by saying that it was "to incentivise the young unemployed to participate in training programmes". It is nothing of the sort. It is Government encouragement for some to emigrate and for most to exist on a pittance and to struggle for scarce places in education and training.

The ending of the Christmas social welfare bonus will hit the most vulnerable of families. It is tantamount to cancelling Santa Claus for the children of the poorest families in our society, forcing some parents into the hands of money-lenders in order to give their child or children some semblance of Christmas cheer. Shame on the authors of this proposal and shame on this Government for adopting such a cruel and heartless measure.

Also being slashed is rent supplement for those dependent on private rented accommodation but with no corresponding increase in social housing provision – the opposite in fact, as the budget for social housing is being cut as well.

The halving of Early Childcare Supplement, to be followed by its abolition next year, is also being presented as progressive reform. It is another cut and it is being replaced with the promise - and I stress the promise - of a free Early Childcare & Education year for pre-school children. Sinn Féin has long argued for direct State provision of childcare and investment in childcare infrastructure. Now, on the basis of so-called savings, we are seeing a half-baked scheme being brought in and supposedly ready to be up and running in less than nine months. ‘Watch this space’ is my caution.

There is no doubt that Fianna Fáil and the Greens are reserving the worst of their social welfare cuts for the December budget, after they have faced the people in the local and EU Parliament elections. But the people are not fools. They know what’s coming down the tracks, including an assault on Child Benefit.

Our public health services, already badly affected by cuts since autumn 2007, are facing nothing short of disaster. But the Minister for Health Mary Harney, like the Queen of Hearts in Alice in Wonderland, makes words mean exactly what she, and only she, wants them to mean. She issued a statement yesterday saying her main aim was to maintain services to patients while services to patients are being reduced or removed altogether.

The Government has placed an embargo on the filling of almost all posts in the public health service. In addition it is expected that contracts for up to 1400 workers in the health services will not be renewed. This is a recipe for disaster in our public health services.

HSE senior management have indicated that they were not consulted prior to the Government’s announcement of the embargo on 26 March but are required to implement the Government decision.

The Irish Nurses Organisation and SIPTU have already indicated to the HSE that it will not be possible to run the public health service in the context of the recruitment embargo as announced by Government.

On Monday communities in Clare and North Tipperary had 24-hour A&E cover removed from their hospitals in Ennis and Nenagh, placing the Regional Hospital in Limerick under enormous pressure. Breast cancer services went from the Lourdes Hospital in Drogheda also, placing Beaumont Hospital under more pressure.

Waiting lists and A&E queues are as bad as ever and will worsen with the massive cuts in jobs in the public health service.

Those nurses who are not laid off now face a doubled income levy and health levy, as well as the recently introduced public services pension levy. At the same time the Minister gives a gold-plated guarantee to the hospital consultants that their €250,000 per annum contract will not be touched. This is for a 33-hour week in the public system and they can still work up to 25% of that time in private practice. And, even at that, the hours are not properly monitored, leaving a question mark over the time spent in and commitment to the public health system by some consultants. They in turn tarnish the public’s view of all practitioners at this level.

I welcome the termination of property-related capital allowance schemes in the health sector, covering private hospitals and other private facilities. Where does this leave the Minister’s precious private hospital co-location scheme and her other privatisation plans? Though welcome in itself, the ending of this allowance scheme is another piecemeal measure in health policy, while the private for-profit health sector continues to be heavily subsidised by the taxpayer in other ways such as the consultants’ contract and the National Treatment Purchase Fund.

At the start of his Budget speech the Minister said that one of the factors that made us an economic success story was a young well-educated workforce. Yet what has the Government done to education in this Budget? They have cut €30 million from the school building programme. This is on top of the education cuts already introduced, cuts which hit the most vulnerable, such as children with special needs.

The cut in the school building programme is pure folly in terms of education, in terms of public spending and in terms of employment.

Children will continue to be taught in overcrowded and sub-standard classrooms. There are 1,400 schools on the school building waiting list. 100,000 additional pupils will enter primary school over the next decade. Where will they be accommodated?

Over the last three years the Government has spent €113 million on rental of school prefabs. The Education Minister has projected a further spend of €48 million on prefabs for 2009. The annual average cost to the Department for each prefab is €12,500. So the cut in the School Building Programme is very bad for the public finances, a cut that will cost far more in the long-run, guaranteeing rental income to companies supplying prefabs but leaving the schools with deteriorating and eventually useless and worthless units.

The Government should be increasing and front-loading the Schools Building Programme as part of a job creation strategy, as proposed by Sinn Féin in our comprehensive employment retention and creation document ‘Getting Ireland Back to Work’.

But there is no job retention and job creation strategy in this Budget. There is nothing to save jobs in either large or small enterprises. The scandal of SR Technics and Waterford Crystal will long haunt a grossly negligent Government that, despite all the warnings over recent years, has allowed highly skilled workforces to be lost to this economy and thrown on the unemployment scrapheap.

And beyond the high profile job losses, with hundreds of workers going at a time, there is another and equally tragic reality in the Ireland of 2009. In our cities and towns and villages across this country, every night the lights are going out for the last time on small retail outlets, small manufacturers and small suppliers of services.

This Budget has done nothing to assist small and medium sized enterprises. But worse than that it is going to compound their plight and force more of them out of business.

The question is "Who is going to spend now?"

The Budget takes more money in levies out of the pockets of people on low to middle incomes. They will not only have less to spend on goods and services, many of them will have nothing to spend on anything, full stop and end of story. Struggling retailers and service suppliers will lose more business and be forced to close.

This Government is going to devastate local and regional economies. Village communities and small towns right across this State are having their local economies driven back to the dreary and dreadful days of the 1970s.

Deputy Mary White of the Green Party has said that the Budget has Green finger-prints all over it. I am glad she admits it.

The Green Party must therefore accept full responsibility for the drastic cuts in public transport, in social housing and in water services.

For the Greens, no less than for Fianna Fáil, it’s a case of blame the people and make them pay.

Minister Lenihan, outrageously, even blamed the people for contributing to the recession by rejecting the Lisbon Treaty – something which has absolutely nothing whatsoever to do with the economic crisis. Opportunism, how are ye?

It was a very telling statement on the Minister’s part. He presented the verdict of the people as a rejection of the EU, which it was not. He claimed it showed that economic success had "fostered a false sense of invincibility". In other words, we acted above our station in life by daring to reject the Lisbon Treaty.

That type of thinking is the product of a national inferiority complex on the part of the ruling elite in this State, a mentality which many thought had been thrown in the dustbin of history.

But no, this cringe-making Fianna Fáil-Green Government feels compelled to apologise to the world for the decision of the Irish people.

Does this Coalition not realise that the people of Europe would have more respect for us if we had a Government that stood by the democratic decision of its people and moved forward on that basis?

In concluding his Budget speech Minister Lenihan referred to our "short history as a nation".

It’s the first time I ever heard the history of the Irish nation described as short. I can only conclude that the Minister was referring to the short history of this State. How dare he equate the two. One thing is certain, though – this Government has a wilfully short and selective memory, a memory that recognises no bad decisions on its part, no bad policies, no mistakes, no apologies and no regrets.

They can apologise to Brussels and Strasbourg but they cannot acknowledge to our own people that the Fianna Fáil-led governments of the past 12 years are even partly responsible for the recession.

There was in the Minister’s speech a grudging recognition that the property bubble was a contributory factor in this recession. But that’s as far as it went.

There was no acknowledgement that the policies of Fianna Fáil-led Governments deliberately inflated that property bubble. They knowingly shaped housing policy, development policy and tax policy to inflate the bubble and gain short-term revenue from escalating property prices through stamp duties. They deliberately decided not to reform our tax system, not to make the wealthy pay more tax, not to create a more equitable and sustainable economy and a fairer society.

I will give them this, though. Fianna Fail are, as they have always been, very wily politicians. The Minister began his Budget speech by outlining the measures to reduce payments to members of the Oireachtas. I welcome the reductions, even though they are essentially a hosing down exercise designed to take some of the political heat off this administration.

The Taoiseach was very clever in his strategy to get all 20 of his junior Ministers to resign and to reappoint the reduced number of 15 after the Budget. He will keep them on board, get the Budget measures through, keep them sweating and then make his selection.

Now isn’t it an awful pity the wily leadership of Fianna Fáil did not put as much careful thinking and strategy into governing this State as they put into managing their hold on Government and looking after their own Deputies, Senators, councillors, party members and friends?

And, by heaven, were they well looked after in the Celtic Tiger years! The Galway tent is gone but the memory lingers on.

Now this Budget has created a new twist in the incredible story of Fianna Fáil and their property developer and banking friends. This is the triumvirate that brought down the economy.

Their greed created and sustained the property bubble. They used the short-term and unsustainable revenues from that bubble to allow the Government to avoid taxing the wealthy. They encouraged a mania for property investment based on easy credit. The banking chiefs were a key part of the conspiracy, doling out the loans, raking in the profits and rewarding themselves with massive salaries and bonuses. But the profits were as unsustainable as the revenues. The result was the banking collapse.

Now the Government is going to make the people take on the toxic loans of the banks. It all comes back to the taxpayers yet again who face a massive risk, on top of the bank guarantee, courtesy of this Government.

As a result of the mess created by politicians, developers and bankers, the livelihoods of low to middle income working people and of people on social welfare are being savagely attacked, with worse yet to come. And even after the fall in property prices there are still tens of thousands of people on local authority housing waiting lists.

Minister Lenihan said yesterday: "Some did warn that the housing market was unsustainable. Plenty did not."

We in Sinn Féin stand on our record in that regard.

In November 2003 at the Construction Industry Federation conference the then Minister for Finance Charlie McCreevy actually asked advice from the assembled developers and property speculators on housing policy. I stated at the time that the Government, in tandem with the same developers and property speculators, was directly responsible for the spiralling price of houses. It was at the behest of the Construction Industry Federation that the Government gutted Section V of its own Planning Act 2000 which required 20% of new developments to consist of social and affordable housing.

The housing policy of the Fianna Fáil-Progressive Democrats government was totally market-driven. As a result we had massive local authority waiting lists and even people on above average incomes could not afford a home. Between 1998 and 2003 the price of a new house in this State rose on average by 177%.

But in terms of policy nothing has changed. This Budget actually slashes the funding for the provision of social housing by local authorities.

The Government has learned nothing.

They have not learned the most basic lesson of all, that the real value of a home is the shelter it provides, the security it offers and the anchorage and stability it brings to the lives of all who live there.

They have not learned that the best investment is in people, not property, in the real economy of production and jobs and not in the unreal world of speculation and the casino of the stock market.

It need not have been this way.

We in Sinn Féin were among those who proposed alternative ways, fairer ways, to create wealth and to share wealth. That must still be done but, because of the disastrous governance of Fianna Fáil-led administrations, it will be much, much more difficult.

But however difficult, the longest journey must begin with a first step and the first step will have to be the removal of this rotten Government.

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