Workers Party budget alternative

The Budget - A Socialist Perspective

The Central Executive Committee of the Workers' Party endorsed the following statement with relation to the budget which will be put before the Dáil on Wednesday, 9th December 2010.


Introduction & Political Context



The 2010 budget will be presented to the Dáil on Wednesday 9th December. The general parameters of the budget, and therefore the politics behind this budget, have been in the public domain for many months.


In summary the budget is going to be a slash and burn budget, with the aim of reducing public spending by €4 billion - a target which the government has set in stone.


The implications of this budgetary approach are that services will be cutback and the wage bill slashed. Whether the reduction in the wage bill happens as a result of redundancies, wage cuts, or a mixture of both is presently up in the air.


Even within rightwing economics there are serious questions about whether the Fianna Fail - Green Party strategy is the correct one. Put simply - if the government reduces the number of public servants; reduces the wages of those who remain; and create an atmosphere of uncertainty amongst that entire sector then their willingness and ability to spend is massively reduced - then creating a cycle deflation.


However, viewed from a progressive or socialist point of view the budget is a massive attack on the working class and a further clear statement that the poor must pay for the sins of the rich. Over the last 10 years the land speculators; the big builders; the bank shareholders and senior management; the professional classes especially those related to construction have had a financial bonanza. Individuals were buying “trophy homes” for over €20 million; were being whisked to race meetings by helicopter; were paying no tax.


The bubble has burst. The combined bail-out for the banks will be an estimated €90 billion. 200,000 people have lost their jobs. Thousands have lost their homes and thousands more have mortgages which they are struggling to meet. Yet the public discourse has been turned about. The propaganda now is that we were all culpable; we were all greedy; we were all living beyond our means - and therefore of course we now must all work together - in the national interest - to save the country.


That this complete reversal of the truth has been able to gain credence shows both the power and the unity of the political, business and media establishment in this country. However, even allowing that the paradigm has shifted it is in the implementation of the concept of “we must all work together in the national interest” that the real sting lies.


The establishment has managed to sell two ideas - that there is no reservoir of wealth in this country and that the public service is overpaid and overstaffed - as the backdrop to this budget. Brain Lenihan can then claim that there is no scope for new taxes next Wednesday and he will argue that when he slightly increased taxes last year the actual tax-take fell. (The reason tax take fell has nothing to do with his tinkering with rates 12 months ago and everything to do with the collapse of construction which has taken until now to work its way fully into the economy).


We understand the politics behind the attack on the public sector, and see it as a clear extension of the politics expounded by Mrs Margaret Thatcher so disastrously in the 1980s in Britain. The politics are the classic politics of divide and conquer: attempting to set worker against worker; private sector against public sector; unemployed against employed. It is incumbent upon everyone in progressive politics to highlight and oppose this political gambit.


We also understand the economics behind the attack on the public sector. It is the economics of privatisation; the politics of greed and private profit; the gombeen politics of mé-feinism. The private sector – having exhausted the profit possibilities – at least for the time being – in banking; land speculation and share dealing have now turned their attention to the public utilities. They see ill-health, educational need, water supply and sewage services as an opportunity to line their own pockets. As this group ruthlessly exploited the boom years of the so-called Celtic Tiger they now wish to exploit the depression which arose from their greed.


As a socialist party we are saying to the government;


A: Tax; This has been a running sore in Irish politics for the last 35 years. The issues highlighted 30 years ago in the massive PAYE marches have not changed to any major degree. There is now less tax on wealth than there was then and we now also have the reality of the tax fugitive status which is availed of by approximately 6,000 Irish citizens.


Our core demands are:

* An end to the “tax exile” status. These people are tax fugitives who are using an arcane law to rob the Irish state. The hypocrisy with which some of these fugitives then portray themselves as philanthropists adds insult to injury.

* A new top rate of tax of 50% on all income above €120,000

* The treatment of all income (EG sale of shares, etc) to be on the same basis as PAYE

* A complete review of the tax reliefs and shelters. Most of these should be abolished and those that remain (eg mortgage relief, health insurance or pensions) should have a strict maximum and be available only at the bottom rate of tax.

* The introduction of a wealth tax and also the introduction of a windfall tax on land rezoning or speculation.


B: Job Creation: Last March we published a document “The Economic Crisis - A Socialist Solution” in which we set out very clearly areas where the state could either immediately stabilise employment or create jobs. Amongst the proposals then were:

    Job creation by investment in social infrastructure, funded on a mortgage basis against the national pension reserve fund

   Job creation by upgrading heating and insulation levels in existing houses, resulting in savings to both families and to the state

• The utilisation of our natural resources for sustainable job creation. The ongoing scandal of the robbery (aided by high level political influence and corruption) of our mineral wealth, and our oil and gas wealth (as most urgently highlighted in the Rossport / Corrib Oil debacle) has seen thousands of jobs and billions of Euro in state earnings shipped out of our country.

  An emphasis on diversification and added value in our food production to maintain the high number of jobs in the agri / food sectors.


C. Health. This is one of the sectors, still under the direct influence of the last remnant of the disbanded PDs, which is being lined up for savage cutbacks and simultaneously being primed for privatisation. We believe that the ideology driving the Department of health and the HSE has led to a waste of tax-payers money. We believe that in this budget over €1 billion can be saved without one iota of cuts to patient services.

(i) End the tax subsidy to the rich and to the private hospital operators. Private health providers reap a huge benefit from the tax-payer each year. This is done in four ways - tax relief on Private health insurance; tax relief on the building and operation of private hospitals; private beds in public wards; the treatment purchase scheme.

(ii) The overpayment of hospital consultants; and the handing out of contracts to private business consultants willy-nilly by the HSE is a further scandal. The “co-location” of private hospitals on the grounds of public hospitals is of course a further waste of tax payers money.

(iii) Sara Burke, a writer and broadcaster on the health service, is one of many prominent commentators whose analysis is broadly similar to our own. She also estimates that in any one year one billion Euro could be saved merely by ending the public subsidy of the private health care industry. This is very much in line with our own policy document published some years ago and must be part of our response to the budget.


D: The Banks. In 2009 the banks sucked up €7 billion of public funds and  NAMA will see the state underwrite loan notes to the value of almost €60 billion. Anglo Irish is now a state bank. The proposals we are putting forward for this budget do not deflect from o our long-term goal is the nationalisation of the entire banking sector.

*  Our demand is simple: no more state aid to private banks. (As Economics Nobel Prize winner Prof Stieglitz stated at a recent conference in Dublin: “If, under the rules of capitalism they go bust then they should be let fail and the bond holders become the new owners”)

* Anglo Irish bank should be turned from a zombie bank to a properly functioning State bank which could give funding to those businesses in need.


E: Quangos / State bodies. There are hundreds of these and most of them should never have been established as separate corporate structures. Within a public sector model they are highly inefficient. However it is at the top - at the CEO and Board Level - where the complete waste of resources exist. We have seen the culture at the top of FÁS, DDDA, Foynes Harbour Board to name but a few. These people  - most of whom are dedicated to the private sector - give the entire public sector a bad name.


Once again we call for unity amongst all workers, public and private sector, employed or unemployed; pensioners, students and those working in the home against the most savage budget for over thirty years.


 Issued 7th December 2009

Peace, Work, Democracy & Class Politics