Budget Day in Ireland


On the 7th December, the Irish government, led by Brian Cowen and Fianna Fail introduced what was widely expected to be, and turned out to be, what has been branded the most austere budget in the history of the Irish state. For months, even before the recent fiasco with the IMF and European Union bailout, Irish people have been expecting the harshest budget possible and on the day of reckoning have found out exactly what it will take to wipe out the deficit created through the bailout of the banking system.

 

Public spending has been slashed across the board with the most hard felt changes taking place under the social welfare and tax systems. While there has rightly been no change made to state pensions for retired civil workers, child benefits, job seekers allowance payments and social welfare payments have all been cut, along with a reduction in the minimum wage by €1.  The new “Universal Social Charge”, which was previously in place as both the income and health levies has seen the starting point for this payments drop a whopping €22,000 from €26,000 to just €4,000. Crucially, tax bands have been widened to bring 300,000 more people into the tax set-up. This will be mostly felt by those on low wages; previously anyone who was paid €18,300 per annum or less was exempt from being taxed, this has been dropped to €16,016. And what surely must end up being the biggest disgrace of this budget, the corporate tax, set at half the EU average of 12.5%, has stayed at that figure, meaning the banks that have caused this crisis are looking increasingly likely not to have to pay a penny for it! The Taoiseach’s salary, something that has long been a bone of contention for Irish citizens, has been slashed again. Up until recently, this figure stood at a whopping €310,000, dwarfing the leaders of such countries as the United Kingdom, the U.S., Germany and France, and made him the highest paid leader in the world second only to the president of Singapore. Following previous cuts, this figure still sits at the princely sum of approximately €214,000. Students, one of the groups that has recently made the most noise in speaking out against this government, have seen their fees rise from €1,500 to €2,000, a figure about one thousand euro short of what was expected but one that is set to cause considerable outrage nonetheless. Just to drive home just how unjust this budget is, one group of people, yes, ONE GROUP, are now better off than they were on Monday – if you live at home, have no dependants, don’t pay a subscription to a trade union and are earning exactly €26,001, then you ARE better off under this budget. 

 

From early morning the protests had begun outside the gates of Dail Eireann with male protestor parking a cherry picker in front of the building before using the controls in the cabin to raise himself up. He began blaring Lady Gaga and the theme song from ‘The Good, the Bad and the Ugly’ through a megaphone before displaying a banner with the words "To the politicians who vote for the budget today, the people will vote you out tomorrow." In the Clondalkin area of Dublin, students in a number of secondary schools staged a walkout in protest of the budget after lunch, while at the same time, back outside the Dail, a ‘pots and pans’ protest made up of people using basically anything they could get their hands on that looked like it would make some noise began to get started. Later in the evening, as numbers of this protest began to rise to several hundred, the 1% Network gathered at the Wolfe Tone Monument with numbers estimated at around 1000. Following their march to the Dail, they were joined by a further 600 protestors from the Right to Work group. While this figure is dwarfed by the previous November protest of 100,000, it is still a significant number and if the budget had have been delivered at the weekend, the number would have been far, far higher. (Possibly one decision this government has somehow managed to get right?)

 

So what does this mean and where do we go from here? Inevitably, the budget has hit the poorest members of Irish society the hardest. As has been the case with this government since the start of the recession and banking crisis on this island, they have stuck by their policy of ensuring it is the ordinary worker and citizen who will pay for the folly and stupidity of those that created the problem in the first place. Minister Lenihan has today argued that we will begin to get money back off the banks as soon as they become profitable again. He also claimed that this budget, to quote his exact word, “progressive”. He would be hard pressed to find one person, let alone a group, that believe him. This is the government who, when the entire collapse was starting, tried to convince the Irish people that the backing of the banking system using state finances under the set-up of NAMA, would sort out our problems and have us back on track in next to no time. This is still the government who, even as the IMF was LITERALLY landing in Dublin airport, was continuing to deny that we were on the verge of a bailout. This is the government that negotiated the extortionate rate of 5.7% on the loan of €85 billion that has determined the future of (and this is the conservative estimate) at least two generations of Irelands population. The Irish people have absolutely no cause to believe his argument that eventually the banks will have to pay for the crisis.

 

The entire opposition to this government, inclusive of both right and left wing factions along with independent groups, for once agree on one thing. This budget has resigned the entire country to a bleak future and a definite return to the days of emigration. Can it be stopped? Immediately, no. On Monday the government courted and successfully struck deals with a number of Independent Ministers to ensure they had their support for the budget. It was these Ministers on who the passing of this budget counted as without their voted the opposition would have won the ballot against by the slightest of margins. However, there is growing feeling throughout the country that this is just the start. Already, the newly launched United Left Alliance of who the influential Socialist Party member Joe Higgins is a member has called on all union members to hold a 24 hour strike. Unfortunately, this was called for too late to be able to take place on budget day but the idea is starting to gather momentum. Students groups are sure to hold another round of protests which saw 40,000 take to the streets of Dublin a matter of weeks ago. Other left wing groups such as the 1% Network and the Right to Work group are planning actions in the coming weeks. 

 

Most significantly though is the General Election which has been called for the start of next year, with the date yet to be decided. Fianna Fail are widely expected to have a catastrophic fall from power. The current leader, Brian Cowen, is widely seen as incompetent and with no other member of the party appearing to be in a position (or more probably, unwilling) to take over the reigns of power before the election, they’re fate is already sealed. The recent by-election in Donegal-South saw a previous Fianna Fail stronghold, somewhere they would have been guaranteed a win even up to about 1 ½ to 2 years ago, offer a possible window to the future. The Sinn Fein candidate, Pearse Doherty, took the seat with a massive 40% of the vote compared to 21% for the Fianna Fail candidate and 19% for the Fine Gael candidate. While it would take something of a miracle for Sinn Fein to be the majority party in the General Election, at the very least Labour, our biggest left wing party, should be in a position to make huge gains. Whatever happens, it seems over the coming months there are big changes on the way to Ireland.

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