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Budgetary response to jobs crisis grossly disproportionate – Tóibín

7 December, 2011


The government said that its objective was to stimulate growth and create jobs. However there is a deep contradiction between the words and actions of this government, according to Sinn Féin jobs spokesperson Peadar Tóibín TD.

Deputy Tóibín said:

“This government has found a way to operate outside the laws of physics and economics if it believes that taking money out of the economy, cutting capital spending and increasing costs will lead to growth or employment.

“The sad fact is that this government has settled on what they consider an acceptable level of poverty, unemployment and emigration. The government’s own figures, based on a now unrealistic growth figure, state that 400,000 people will be on the live register in 2015.

“The increase in VAT will hit low and middle income earners disproportionally pushing many into poverty. But the VAT increase will also have a negative consequence with regards jobs and small business.

“The minister said that 3% will not make a difference. Not to him maybe as he earns €170,000 a year, but to those living on low incomes every penny counts. Increases in VAT and carbon taxes will mean jobs being lost, businesses closing and will reduce tax receipts. The only long term solution to this is to seek tax convergence with the north, a policy that will find willing participants in Stormont.

“The only new initiative unveiled in this budget is €20 million for job training. 150 times more resources will be given to Anglo Irish Bank next year than supporting the long term unemployed.”

Full text of Deputy Tóibín’s speech below:

Micheal Noonan said that his objective was to stimulate growth and create jobs. Brendan Howlin said the budget was about jobs. The Taoiseach told us that this would be a fair budget.
However there is a deep contradiction between the words and actions of this government.

This Government has found a way to operate outside the laws of physics and economics if it believes that taking money out of the economy, cutting capital spend and increasing costs will lead to growth or employment.

Despite the claims of job creation being central the fact is that this government has settled on what they consider an acceptable level of poverty, unemployment and emigration.

The government’s own figures based on a now unrealistic growth figure state that 400,000 people will be on the live register in 2015.

This is a shocking indictment of this government that they has accepted this crisis level of unemployment as normal.
These figures may be acceptable to the well-insulated ministers in this government but they are not acceptable to our people, our businesses and our economy.

To add insult to injury the Finance minister told us yesterday that the labour market was flexible that 125,000 people had come off the register last year. The inconvenient truth being that under this government the levels of unemployed and long term unemployed has grown.
The budget that has been delivered over the last 48 hours has been a severe economic body blow to each of the 450,000 people unemployed, the 76,000 people forced to emigrate in the past 12 months.

But let’s look at what the budget actually will mean in terms of promoting economic growth, tackling unemployment and ending emigration.

As has been discussed by my colleagues the increase in VAT will hit low and middle income earners disproportionally pushing many into poverty.

But the VAT increase will also have a negative consequence with regards jobs and small business.

From a line from Dublin to Galway northward, retail industry will be hit by an unfair competitive disadvantage with their competitors in the north of the country.
The minister said that a 3% difference will not make a difference. Not to him maybe as he earns €170,000 a year, but to those living on low incomes very penny counts.
Increases in VAT and Carbon Taxes will mean jobs being lost, businesses closing and will reduce tax receipts.
The only long term solution to this is to seek tax convergence with the north, a policy that will find willing participants in Stormont.

The government talks jobs, however the only new initiative unveiled in this budget is €20 million for job training.
We have some initiatives that are to be welcomed, on R&D and export support.

However all the other initiatives such as the loan guarantee scheme and micro enterprise scheme are reheated policies that were first announced in the summer and that are still not in place.
Juxtapose this with the fact that this budget will take €3.7 billion out of the economy and the government has confirmed that a further €3.1 billion will be paid out on the Anglo promissory note next year.

150 times more resources will be given to Anglo Irish Bank than supporting the long term unemployed. It is obvious were this governments priorities lie.

We are told that the government will act to retain jobs but then the government cut capital programmes by €750 million which will lead to a further 7,500 people out of work.

For the whole of this year there are 5,000 Jobsbridge places to deal with more than 5,000 people who are emigrating and becoming unemployed each month.
In this budget public spending cuts and new taxation will cost in excess of 15,000 jobs this year. On the other side the government will create an additional 6,500 short term training places.

The government’s response to the crisis is grossly disproportionate to the scale of the crisis.

The budget also sought to revive the spectre of the property speculators.
It reduced the stamp duty on commercial property by 4% and gave a 7 year capital gains holiday to new commercial property purchases.

This is a jobs free pump priming of the speculative property market that could have been announced in the Galway Tent 5 years ago.

Your government also ruled out taking any action to end the crippling Celtic tiger rents.

Yesterday this government buried their dropping of their promise to reform upward only rents in the budget. Landlords and speculators must be rubbing their hands.
The retail sector has provided legal opinion that identifies ways to deal with the issue.

The government should publish the advice of the Attorney General without delay. Celtic Tiger era rents need to be reduced across the board to enhance our competitiveness reduce costs and secure jobs.

It appears that this government has sided with the speculators against small business.

This government pays our €53 million every year in rents that have upward only clauses. The government is paying at least €10 million over the odds for these rents.

What message has the government for the 50,000 workers in retail whose jobs are now in jeopardy?
What message has it sent out to our small business struggling to stay afloat and pay excessive rents?

And let’s be clear who will pay for this. It will be our retail sector, small businesses and the public purse.
The government did nothing to reform regressive rates. There was no investment in ICT infrastructure.

Indeed development in transport infrastructure has stalled. €18 million that will go into Enterprise Ireland next year is taken out of last year. There is now detail on enterprise development reform.
And all of this to buttress French and German banks from contagion.
In case Fine Gael and Labour hadn’t noticed you are democratically responsible to the people of this state, not to the bond holders and not to the German and French electorate.

In case you had not realised it but the mandate that you received last February calls for you to show leadership not try to outsource it to 2 of the 27 EU nations.

You were elected to show leadership not call for it elsewhere.

The European Union should be a common market and a partnership of nation states.

You should be defending this and not scurrying around looking at ways to serve up any remaining sovereignty to Merkel and Sarkozy.

A hand over of tax and budgetary powers to Brussels would cost thousands of Irish jobs and sentence this country to decades of cuts and austerity.

Misgovernance under democratic self-determination can be ousted out at election time. German and French centred governance oblivious to the Irish needs on the periphery cannot.

Sinn Féin has outlined costed alternatives in line with international best practice that prioritise and will stimulate growth, that would create employment, tackle the deficit and share the burden fairly.

Only through growth can we break the cycle of austerity, recession and unemployment.

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