Wednesday, November 23, 2011

There is an alternative

Since it came to power last February the Fine Gael/Labour government has blamed every bad decision, every u-turn in pre-election promises on the last government. Everything is Fianna Fáil’s fault.

It is a fact that the current economic mess in the south is primarily a result of the bad policies of the last coalition government, but this government has chosen to implement the same austerity strategy.

Last week it produced its medium-term fiscal report which sets out its financial outlook for the next four years. It cleared up one important issue would the cuts to the budget be €3.6 billion or €4 billion? They opted for €3.8 billion. It also revealed that government predictions of a 2.5% growth next year have now been revised downwards to 1.6%.

Spending cuts will make up €2.2 billion. This includes a €750 million reduction in capital spending which is the equivalent of at least 7,500 jobs lost. New taxation measures will see increases in VAT (up from 21% to 23%), excise duties, carbon tax and a property tax.

All of these will hit low and middle income families hardest.

This blog found the government’s acknowledgement that unemployment levels in four years time will be almost equivalent to where they are today – and that after four years of four austerity budgets – to be the most revealing fact in the report. The Government’s plan will mean that 382,000 people will still on the live register in 2015, at a minimum.

Where is the hope for citizens? If emigration were not taking place at the rate of up to 50,000 a year unemployment levels would in fact be significantly higher in four years time. As a measure of the success or failure of government policy that adds up to a big F.

The negative impact of current government policy is evident in the fact that this time last year the Fianna Fáil/Green Party government told the people that there would have to be a budget adjustment of €9.8 billion over the next four years.
Earlier in the year, the Fine Gael/Labour government increased that adjustment figure by €2 billion. Last week they added €600 million to this. The state now needs an adjustment of €12.4 billion.

The reason this keeps going up is because the government’s deflationary policies are not working. Flat taxes are not working. Not investing in the economy and expecting exports to lift all our boats is not working. As unemployment rises and wages shrink, and people have less money to spend, then money raised through consumption taxes, like VAT, are collapsing.

There is an arrogance about this Government, as there was with the last. They talk and think like right wing economists. They don’t look at the impact of their policies on citizens, on families, the young and elderly and the sick.

People are being squeezed. The accumulation of three years of austerity has not fixed the economy but more importantly, it has pushed many families into poverty. And this Government says it plans four more years of the same.

That’s why Sinn Féin puts people front and centre in our Pre-budget submission - ‘The Route to Recovery’ which we published earlier this week.

Sinn Féin has repeatedly argued that there is an alternative to the politics of Fine Gael and Labour, and of Fianna Fáil and our pre-budget submission spells that alternative out.

We believe that the deficit caused by the disastrous policies of the last Government and of this one has to be reduced and the state can’t continue borrowing large sums indefinitely.

But the plan to reduce it by 2015 by imposing savage cuts to frontline services and levying flat taxes on struggling households will be hugely damaging socially. There is no real difference between the tweedledee policies of this government and the tweedledum politics of the last.

After the general election in March Labour asserted that reform begins with the banks and it committed to ‘tearing up the blank cheque policy on banking that has undermined our very sovereignty’.

Yet three weeks ago the government gave more than €700 million to unguaranteed bondholders in Anglo and plans to hand over another €1.2 billion in January.

The government promised to prioritise Job creation yet unemployment is higher today than it was when it came to power. And according to its own medium term fiscal report last week there will still be almost as many people unemployed after 4 years of their austerity budget.

The government also promised an end to cronyism but reports this week confirm that it’s still jobs for the boys at the top as Fine Gael and Labour appoint over 20 people with connections to both to senior positions on state bodies and within the judiciary.

And Labour specifically pledged that the choices it made would be fair. Tell that to the thousands of students who protested in Dublin last week over broken promises by Eamon Gilmore and Ruairi Quinn; or the families in mortgage distress; or those who have lost their jobs and see no hope of employment because of the policies of this government.

Sinn Féin’s pre-budget submission is a costed, effective alternative to the policies of the government which is focussed on economic recovery based on fair taxes, investing in jobs, debt restructuring and growing the all-Ireland economy.

We are for a fairer tax system that targets wealth and lifts the burden of the least well o0ff, for example by abolishing the Universal Social Charge. We are for investing in jobs (which will increase state revenue and reduce the social welfare bill) and the elimination of wasteful public spending. And we are against paying out billions in the promissory notes to Anglo Irish and would restructure the remaining unguaranteed, unsecured bonds.

Sinn Féin’s pre-budget submission is about protecting public services and those on low and middle incomes. We have shown that this can be done through taxing wealth, eliminating wasteful public spending, stimulating the economy, and tackling exorbitant salaries in the public sector.

We have put forward effective proposals that would create new jobs and retain existing ones and puts the needs of the Irish people above the needs of banks and bondholders.

For any of you who wish to know more about our pre-budget submission go to It’s all there.

But be assured there is a viable alternative to the policies of Fine Gael and Labour and there is hope.


Timothy Dougherty said...

Hello Gerry,
If not for Sinn Féin’s economic thinking to address the arrogance and legacy of the last disastrous Governmental policies, it would be the same strategy.
I believe that change is possible, as with a all-Ireland government.
The need for delivering proper healthcare, education and infrastructure means increasingly political change. Strategies reflecting the reality for Change a flexible approach to this great economic challenge. Sinn Féin is up to this challenge, Fine Gael/Labour looks to the past failures to fix the present. The price is very high and the Irish people are set to pay for the Government’s plan.
Look to see a better day

Timothy Dougherty said...

hello Gerry,
Sinn Féin has put up on the table, a realist view of what can be done.
Fine Gael/Labour government take the no idea veiws, over the Irish financial outlook. "If it broken don't fix it" approach. The chosen austerity strategy, a real human burden on the back of Irish men, women and children. Looking to the past can be helpful only if you see and can lean from it.
As Albert Einstein said: "The distinction between the past, present and future is only a stubbornly persistent illusion."
Ireland can not live in the failure of governmental policy of the past.