Budget 2013 – Together we can defeat austerity

December’s budget will see an unleashing of new assaults on public services and living conditions for working class people, writes Paul Murphy MEP. The government and the Labour Party in particular, will declare that unfortunately, there was no other choice. This is a lie.

The government is making a political choice in imposing yet more austerity policies – a choice to prioritise the interests of the rich, in particular the bondholders, at the expense of the interests of working people, unemployed people, pensioners, small farmers and young people. Another choice is possible – to take anti-capitalist measures to place the needs of society as a whole ahead of the bondholders.

Out of the €15 billion gap between what the government foresees raising in revenue and spending next year, over €9 billion euro is made up of payments to various bondholders and on the Anglo Irish promissory note. Irish government debt, now projected to rise to over 120% of GDP next year, is entirely unsustainable. It is also odious debt, which in large part was built by the state taking over private gambling debts. This debt must be repudiated, with compensation only to those who can prove need, such as pension funds or ordinary people who own bonds.

­­Refusing to pay the government debt would leave a deficit of €6 billion euro, or just under €10.5 billion if the Universal Social Charge, household tax and the cuts to Special Needs Assistants were immediately reversed. The wealth exists in Irish society for that gap to be met through a combination of increased income and corporation tax together with the introduction of a wealth tax. For example, simply increasing the minimum effective rate of corporation tax to 12.5% while increasing the rate itself to 15% would raise €4 billion. Inroducing a wealth tax of 5% on the richest 5% would raise €2.5 billion euro. Increasing income tax on earners of over €100,000 could yield an additional €1.5 billion. A Financial Trasactions Tax would raise an estimated €500 million. The gap of €2 billion could be paid for with €2 billion of the funds redirected from payments from the banks to the bondholders.

These measures would have the effect of halting the disastrous downward spiral of austerity and increased unemployment that the economy currently faces. However, on their own, they would not turn the situation around, because central to the economic crisis is the continuing collapse of private sector investment in Ireland. Despite an increase in profits over the past two years, investment has continued to slide – it is almost 70% less now in nominal terms than in 2007. As a percentage of GDP, Ireland’s investment is only slightly above half of the EU average. This illustrates the inability of either indigenous Irish capitalism or multinational capitalism to drag Ireland out of the crisis.

A massive programme of public investment is needed. Diverting €15 billion from the funds currently scheduled to be paid to the bondholders of the private banks could fund a massive public investment scheme to create an estimated 150,000 jobs directly, resulting in many more jobs being indirectly created.

However, even these measures would prove to be inadequate if ownership of the the key sectors of the economy and therefore the decisions over investment, were left in the hands of big business. The pseudo-nationalisation of the banks must be replaced by their full nationalisation under democratic public control and ownership. These banks could then be directed to provide credit to small businesses and farmers, together with writing down mortgages for ordinary people to their true value.

In addition, the key sectors of the economy – the construction companies, the IT industry, the major retail multiples, the major agribusinesses, the pharmaceutical companies etc. – should be taken into democratic public ownership under workers’ control and management. In this way, a democratic plan could be drawn up, to plan investment and the economy in the interests of working people as opposed to the profits of a few. Such socialist measures need to be taken in co-ordination with the struggle for socialist change across Europe.


How can austerity be defeated?

By Cillian Gillespie

A further €3.5 billion will be taken out of this economy through a diet of cuts and the introduction of a new property tax in December’s budget. As we approach the 100th anniversary of the 1913 lockout, workers and the unemployed are once again left with no choice but to engage in an all out struggle to defend their living standards.

Austerity has uttelrly failed,. Recently even the IMF was forced to acknowledge the detrimental effect that these policies are having on economic growth. But they are working for some people – the bondholders who are having billions handed over to them by the taxpayer and big business who are paying an effective tax rate of as little as 6%.

The mass non-payment of the household tax by working class communities is a brilliant example of how austerity measures can be challenged when a decisive leadership, in this case through the Campaign Against Household and Water Taxes, is given. As of now, 52% of households have refused to pay the tax, this is a massive grassroots campaign of civil disobedience.

This was achieved by CAHWT through organising mass meetings of tens of thousands of working class people throughout the state in the first three months of the year and bringing the same number of people into activity in protests and rallies of tens of thousands to ensure non-payment was built. Such a campaign will need to be built in opposition to the new property tax as well building a political opposition to the broader policies of austerity.

It is not a coincidence that it was the Socialist Party who played a key role in building CAHWT. Unlike the leadership of the Irish Congress of Trade Unions (ICTU), who have hung out the white flag of surrender to the government and bosses, we understand that austerity is not just a wrong policy but a conscious attempt to transfer wealth from working class people to privately owned banks and big business.

The fact that 20,000 demonstrated for abortion rights in the aftermath of Savita Halappanavar’s death shows how the anger of ordinary people can be harnessed into a movement for change.

The crisis of capitalism is deepening and austerity is making it worse. There is an urgent necessity for a mass struggle in Ireland and Europe to mobilise the power of working class to defeat the anti-working agenda of the EU/IMF and European governments. The general strikes that took place across Europe on 14 November give an excellent outline of how a united movement against austerity policies can be built on the continent.

Working class people have had enough – all that is needed is some leadership and direction. The union leaders should follow the example of workers in Spain, Portugal and Greece – a one day strike in Ireland of public and private sector workers against the cuts and austerity taxes would be a body blow against this weak government.


­Make a stand – join the Socialist Party!

By Eddie McCabe

Together, working class people can defeat this government. The Socialist Party is confident about this. We are also confident that working class people united internationally can repel the onslaught of the EU, the IMF and their faceless masters in the international markets.

A glimpse of this potential power was shown on 14 November, as a coordinated general strike shut down southern Europe. For millions of people this posed an important question; who really runs society?

The answer was self-evident.

From this basic, but fundamental reality flows the uncompromising politics of the Socialist Party. If working people create all of the wealth in society, then why should we accept unemployment, austerity or poverty? If nothing can stop us when we take collective action, then why do we need political or trade union representatives who try to stop us from taking such action?

The Socialist Party has an unrivalled record of assisting and leading struggles of workers and young people in Ireland. In this economic climate that’s hurtling towards depression, there will be no shortage of battles to defend our basic living standards and democratic rights – for the destruction of such things are central to any capitalist “recovery”. We will be to the fore in those struggles.

However our primary goal is to make the case that there is an alternative to this system that is based on robbery, greed, corruption and misery. One in which the skills, talents and abilities of ordinary people are used to build a society based on socialist equality and democracy – a democratically owned and controlled, planned economy, to replace this market madness.

If you support us and our campaigning role then by all means vote for us or donate to our campaign funds, but we urge you to go further and become a member of the Socialist Party yourself. If now is not the time to make a stand, then when is?