The ritual political budget dance has begun in earnest before the Government announces its October 2014 budget proposals for 2015. The political band is playing some old favourites such as tax cuts, welfare cuts and efficiencies in services to the backdrop of an election drubbing of the Government parties in the recent Local and European elections.
Their choice of mood music is designed to win back public support and to repair their image before the 2016 general election. A word of caution, do not let them lead you on a merry dance of promises and false choices. Government is about choices and the values that underpin these choices – at budget time these values are clearly exposed for all to see, they shape our society and the well being of our citizens.
As part of our Troika bailout agreement, this October 2014 Budget should continue in the same vein of a long line of austerity budgets by making a €2bn adjustment through tax increases and cuts to public spending, thereby reducing Ireland’s borrowing below 3% of GDP by 2015.
The IMF, the EU and our own national austerity hawks, the Irish Fiscal Advisory Council, are insisting that the Government delivers on the two billion in cuts, while the trade union think-tank NERI says that two billion is not required because of our slight economic improvement and because of the domestic damage two billion in cuts would cause, particularly to those dependent on state services.
Some of the choices have already been made and the value systems that underpin them clearly exposed for all to see.
For example, this Government has already made the choice that Irish citizens regardless of means will pay property tax on their home; they have decided the citizens will have to pay for water – a basic human necessity; they have decided not to invest in capital expenditure such as social housing projects; they have decided to cut welfare for the under-25s; they have decided that the unemployed are a problem and should either be banished from these shores or forced into largely futile work for free schemes such as JobBridge.
They have decided that multinational corporations are a privileged and protected species who must never be asked to make a contribution to the repair of Ireland’s economy or fiscal condition.
Our Taoiseach has pandered to the multinational corporations and their threats of capital flight – his reassuring words, “You can ring me anytime”, rings hollow in the ears of those citizens struggling to put food on the table or keep a roof over their heads.
The facts are that this Government continues to facilitate multinational corporations avoid and minimise their social contribution (Tax). The existing corporation tax rate of 12.5% (headline) is low by international standards but the “real effective rate” (what they actually pay) is closer to 4%.
For example, Apple paid only €36 million in corporation tax on profits of €7.11 billion. Social Justice Ireland (www.socialjustice.ie) has proposed in its pre-budget submission to Government that all corporations must pay an “effective rate” of corporation tax of at least 6% an increase of a mere 2% in the effective corporation tax rate for most major companies.
This proposal could yield up to €500 million per year. Mandate has called for similar changes in the past and we fully support this policy as the very least the major multinational companies contribute to the repair of our national finances.
But, alas, the Irish Government has already indicated that it is not prepared to upset its corporate friends. Instead the Government would rather impose water charges on every household to collect the €500 million to balance the books.
Water charges will start at circa €240 per year and, no doubt, go only upwards from thereon. The imposition of these water charges on top of the already regressive property tax will have a devastating impact on consumer spending, and lead to more retail job losses and pressure on workers’ terms and conditions of employment as a consequence. In one fell swoop the pay increases won by Mandate and other unions over the past 12 months will be wiped out.
Mandate members intend to pursue our pay policy with renewed vigour so as to ensure that ordinary workers see a real benefit in their wage packets.
Making Work Pay is our rallying call – this can only be achieved through joining unions and taking collective action to win. But if the fruits of our collective industrial struggle are stolen through the imposition of unjust, unfair charges when other options are clearly available, then workers must continue to mobilise both industrially and politically to ensure that those making the policy decisions have the values of social justice and a fairer society at the centre of all their decisions.
The next time a politician tells you we are all in this together, tell them you don’t believe that bull and that you are organising and mobilising to fight back for choices, choices which support workers, a decent living wage – a future in your own country.