Sinn Féin - On Your Side

Government would rather take from children and elderly than tackle high earners and vested interests – Morgan

17 November, 2009


Speaking during the Dáil pre budget debate this evening Sinn Féin Finance Spokesperson Arthur Morgan TD said while his party is prepared to take on big earners and vested interests the Government would rather take from children and the elderly. Deputy Morgan said Sinn Féin won’t join with the other opposition parties in taking a red marker to the social welfare bill.

Deputy Morgan said:

“I welcome this opportunity to put forward the Sinn Féin proposals to the Minister. He has stated repeatedly that he does not want to take the measures his government is about to take – cutting dole, pensions, child benefit and frontline services. Our proposals raise sufficient funds for him to avoid having to introduce any of those measures and we hope he is willing to adopt them. If he is not looking for actual proposals, if he is looking for Sinn Féin to provide political cover to further impoverish the most vulnerable in society, then he will be left wanting.

“Sinn Féin has examined a series of proposals that will contribute to not only bringing our borrowing under control in the short-term, but also raise money for a stimulus package which will address the deficit in the long-term. The government has failed abysmally to recognise the necessity of dynamic stimulus measures to kick start the economy.

“We are challenging the other opposition parties to support these proposals.

“Our proposals are fair. Some are radical. But, with a €22 billion deficit, radical measures have to be taken. The government has shown it is not willing to leave anything off the table. Its proposal to charge medical card holders for prescriptions shows the moral cowardice of its approach. Sinn Féin is not afraid to take on the big earners and the vested interests. The government would rather take from children and grannies.

“We won’t join with the other opposition parties in taking a red marker to the social welfare bill. Our solution to dealing with the the social welfare bill is to create jobs. Our total stimulus package of €4 billion has to be paid for and to this end we sat down and looked at the taxation system and genuine waste in the public sector. In total, combined with a transfer from the National Pension Reserve Fund of €2 billion – that’s €2 billion less than the government’s transfer for Anglo-Irish – we have raised €7.6 billion in our pre-Budget submission.” ENDS


Full text of Deputy Morgan’s speech follows:

I welcome this opportunity to put forward the Sinn Féin proposals to the Minister. He has stated repeatedly that he does not want to take the measures his government is about to take – cutting dole, pensions, child benefit and frontline services. Our proposals raise sufficient funds for him to avoid having to introduce any of those measures and we hope he is willing to adopt them. If he is not looking for actual proposals, if he is looking for Sinn Féin to provide political cover to further impoverish the most vulnerable in society, then he will be left wanting.

Sinn Féin has examined a series of proposals that will contribute to not only bringing our borrowing under control in the short-term, but also raise money for a stimulus package which will address the deficit in the long-term. The government has failed abysmally to recognise the necessity of dynamic stimulus measures to kick start the economy.

We are challenging the other opposition parties to support these proposals.

Our proposals are fair. Some are radical. But, with a €22 billion deficit, radical measures have to be taken. The government has shown it is not willing to leave anything off the table. Its proposal to charge medical card holders for prescriptions shows the moral cowardice of its approach. Sinn Féin is not afraid to take on the big earners and the vested interests. The government would rather take from children and grannies.

Before I outline Sinn Féin’s proposals, which my party launched yesterday, I want to look briefly at the coalition’s own pre-Budget outlook. The government has claimed it is capable of running this state’s economy. A dubious assertion, considering the hames they have made of affairs to date. They have once again set out their plan for recovery in this pre-Budget outlook, which is breath-taking in its assumption of correctness, despite all the previous misguided and downright wrong forecasts from the Department of Finance. This document they produce is laughable in its poor analysis of the current crisis and the solutions to get us out of it.

Let’s start with Page 1 of the pre-Budget outlook, where it states ‘Repairing our banking system – a separate issue to the fiscal challenge’. Now, I will credit you this Minister. You have done a magnificent job of separating the banking issue and your latest brainchild, NAMA, from the fiscal issue. The Special Purpose Vehicle set up for NAMA to keep the €54 billion that the state is going to have to borrow, off the books, is one of the greatest con jobs I have ever witnessed. The mantra from government ministers that this state cannot continue to borrow in the region of €500 million a week, when in one year, NAMA could end up costing the state €1 billion euro a week, is one hell of a sleight of hand. Repeating the myth that the problems caused by the banking system are separate from the public finances does not make it true, Minister. And people will see it is not true when they are faced with a huge debt service because money was borrowed to keep bank managers, shareholders and developers happy, and not for public services like hospitals and schools.

The next page of the government’s document sets out five reasons why it is necessary to take the cruel actions the cabinet is planning to take. Let’s deal with them.

1. ‘To restore economic competitivenes, without which we will be unable to benefit from the global upswing.’ Ah yes, the global upswing that the government is hoping and praying, like the rising tide, will carry all boats. Unfortunately, this government seems to think restoring economic competitiveness can only be achieved by slashing wages and public spending. Never mind our serious lack of infrastructure. Sinn Féin’s pre-Budget submission focuses on using this period of recession to invest in that infrastructure, thereby not only readying the state for a return to competitiveness, but also stimulating the jobs market and hence the revenue stream.

2. ‘To inspire confidence, internationally and domestically, that the deterioration in the public finances is being arrested.’ Well now, if I was an international investor last May, I would have heard this government promise me that by the end of this year, Ireland would have a deficit of just over €19 billion and it would be reducing that by €4 billion. Now we know that the deficit will be in the region of €22 billion, but the €4 billion adjustment is still the government’s figure. So we are cutting spending now to almost stand still. Hardly confidence inspiring. Sinn Féin’s proposals include a stimulus which will raise revenue so the cycle of cutting and deficit contraction can be ended.

3. ‘To prevent the debt level rising to unsustainable levels so that the cost of servicing that debt is contained.’ One word – NAMA.

4. ‘To assist economic growth by taking responsible action on fiscal and incomes policies, which will avoid unnecessary further adjustment in the labour market.’ Interesting. The government has an ‘income’ policy? Can the government tell us how this policy applies to Brendan Drumm? Or the Taoiseach himself? Or does the income policy apply only to people with average incomes? And this being necessary to avoid unnecessary further adjustment. Is this a promise Minister? Are we to believe that after you’ve slashed social welfare, pensions and child benefit, put a charge on medical cards and cut the pay of people on €30 odd grand or less, that you won’t do anything else? There’ll be no further cuts after this Budget? Sinn Féin would protect lower and middle incomes and bring fairness to the top end of the income scale, particularly in the public sector.

5. And finally – ‘To restore expenditure and taxation to more sustainable levels.’ I thought taxation was completely off the agenda for this government. I bet you’re wondering how that dirty little word crept in there, Minister. You tend to focus on the expenditure side of affairs, despite the fact that we have among the lowest public spending to GDP ratio in the EU. Despite the fact that we have a third world health service and overcrowded classrooms. Sinn Féin believes that there is waste in the public spending that must be ended. But we are a country that needs investment in public services. Our taxation system is not fair. Our pre-Budget proposals make a start towards fairness, but there is much more to do.

These, Minister, are your reasons for your proposed fiscal adjustment and I have to say, I question your motivation behind each and every one of them. I question everything this government says because it has lied to us time and time again. It has been wrong time and time again. Not one financial measure introduced over the last 12 months has not brought us closer to recovery. It has driven us further into recession. From the October budget which increased VAT despite the state already being over-dependent on consumption taxes, contributing to the collapse in those taxes – to January when it took money out of the lower and middle income earners’ pockets, lowering their disposable income - to April, when it doubled levies, brought some of the lowest paid into the tax net and cancelled Christmas for people on the brink of poverty. The government has taken from the economy where it makes no sense to take – the bottom and the middle. It has left the top relatively untouched, yet it claims there is no more room for taxation.

Sinn Féin does not subscribe to this. We won’t join with the other opposition parties in taking a red marker to the social welfare bill. Our solution to dealing with the the social welfare bill is to create jobs. Our total stimulus package of €4 billion has to be paid for and to this end we sat down and looked at the taxation system and genuine waste in the public sector. In total, combined with a transfer from the National Pension Reserve Fund of €2 billion – that’s €2 billion less than the government’s transfer for Anglo-Irish – we have raised €7.6 billion in our pre-Budget submission.

As I said at the start, our proposals are radical and they are brave. We challenge the government’s assertion in their document that expenditure cuts are more effective than raising taxation measures to close a deficit, an assertion backed up by the disreputable IMF and that bastion of democracy, the EU Commission. The right will always seek and it will always find other creatures within its ranks to back up its biased view of the world and the government has done it well this year. We argue that expenditure cuts in this Budget won’t bring about recovery. They will bring about poverty, irreversible damage and more cuts next year, and the year after, until the government breaks its cycle of slash and burn economics.

The deficit is a result of our economic woes, not the cause of them and only a stimulus package for the economy will create the momentum for recovery that will ultimately bring the deficit under control. To pay for that stimulus and to bring much needed funds into the state’s coffers, the only option available to this government is to raise money from those who can afford it. A 48% tax rate on income in excess of €100,000 raises €355 million. A 1% wealth tax on assets, excluding farmland, of over €1 million, could bring in €1.6 billion. Standardising discretionary tax reliefs raises €1.1 billion. Capping public sector pay at €100,000 brings in €450 million. These are just a few of the many proposals we put forward yesterday. In total they help us to pay for a stimulus worth €4 billion that invests in a €2 billion labour intensive infrastructure package; that provides for a €600 million jobs retention fund; that cuts excise duty for the Christmas period and returns the Christmas social welfare bonus. These are all business and household friendly measures that will not only boost confidence in the economy but also start bringing in the revenue needed for recovery.

This isn’t rocket science, minister. It won’t be popular for those used to being protected from government measures bar where they have a positive money-raising effect. But it will be a damn sight more popular with the vast majority of people on this island who fall into the not so well off category. And more importantly – it will put the country on the road to recovery.

Minister, you spoke last October about patriotism and how it is necessary in these times. You asked for patriotism from the lowest paid, those who could least afford to contribute. I am asking you now Minister to show patriotism. This is a great land. We are a great people. We are masters at triumphing through adversity and punching well above our weight. We can achieve success again, but it must be a fairer success this time. Not one that benefits the few and not the many. To get there, your start must be fair. What you are planning in December is not fair Minister. It is not just. Our proposals are and we urge you to adopt them.

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