An Bord Snip Nua, headed by the neo-liberal economist Colm McCarthy, has given the government a vast menu of potential cuts from which to choose for this December’s budget. The target is to cut €5.3 billion a year from public expenditure. STEPHEN BOYD analyses the situation.
Taoiseach Brian Cowen has said that no one will be immune from the cuts – but then that isn’t quite true as there is one area that An Bord Snip Nua has not proposed should be changed and that is the paltry 12.5% corporation tax paid by the multinationals and big business.
Major cuts will impact on the unemployed and pensioners, dramatically reduce staffing levels in our hospitals and schools. The teachers’ unions believe that 3,500 teachers will be sacked! On top of all of these attacks, which will have a fundamental impact on our quality of life, our children’s education and our health, they are planning to impose a property tax, a carbon tax and water charges. The next budget will be a tsunami of attacks on working class and middle class people.
Social welfare has been highlighted in particular by the McCarthy report. Pensioners, the unemployed, carers, those on disability payments, one parent families – all must shoulder some of the burden of this recession according to Fianna Fail and the Greens. But the super-rich multi-millionaires and billionaires, the faceless major corporate shareholders, the bank bondholders, the property developers and spivs who helped create this mess are once again to get off scott-free! And to really rub our “faces in the dirt”, all of this is happening at the same time as the government is establishing NAMA which will use up to €70 billion of our money to bail these gangsters out!
The argument being used to justify an at least 5% cut in social welfare payments (to save €850 million a year) is the claim that there is a fall in the cost of living. Yet Ireland is and has been for a very long time one of the most expensive places to live in Europe. Child benefit, a bedrock for many working class families’ income, is also in line to be dramatically cut.
People are living longer and rather than this being something to celebrate, according to An Bord Snip Nua it is a extra burden on the state and “hugely costly for the Exchequer”, which is why they are proposing that the retirement age should be raised so that you can pay taxes and charges for even longer.
Health and education are to suffer dramatic cuts and the imposition of increased charges. In the health service it is proposed to cut 6,168 jobs and this will include doctors and nurses! The proposal is to cut €1.23 billion from the health budget and to impose a new €5 prescription charge for medical card holders and increase the charge for visiting an A&E to €125.
Overcrowded classrooms and underfunding in education are to be blindly ignored and instead of providing more teachers as the government promised, the McCarthy report says that 6,930 jobs should be cut in primary and secondary education with a further 2,000 jobs to be lost in third level education. Plus third level fees of approximately €20,000 are being planned.
In total, the An Bord Snip Nua plans if implemented would result in over 17,000 job cuts in the public sector. The scale of the direct public sector job losses and the cuts in public expenditure of over €5 billion a year will have a devastating impact on working class people’s lives and will deepen the recession further.
It is madness in the depths of the worst recession in the country’s history, with unemployment heading for 500,000 by the time of the budget, to be deliberately cutting jobs and slashing public expenditure. If implemented, the McCarthy report proposals will be directly responsible for even more jobs losses in the private sector. This is the economic equivalent of trying to put out a fire by dousing it in petrol!
Government lies
Colm McCarthy claims that social welfare payments are the highest in the EU and that the public sector is bloated. These assertions are untrue and based on myths deliberately created by the government and economists like McCarthy. According to Eurostat (the official EU statistical body) Ireland’s social welfare payments are fifth from the bottom.
As the Cork Institute of Technology (CIT) economics lecturer Tom O’Connor wrote “The justification trotted out for swingeing cuts in public sector numbers has been based on a view that has now achieved gospel proportions, that the public service is hugely bloated in comparison to the size of the country and by comparison to other countries. Again this is false”.
According to an OECD report in 2008, “Even when factoring in infrastructure investment, Ireland has the third smallest total public expenditure as a percentage of GDP, and this figure has actually decreased over the past 10 years”. Further, the report went on to say that “public service employees increased by 30% between 1995 and 2007 but also from a low base relative to other OECD countries. A policy since the mid-1990s to limit non front-line service employment has meant that public sector spending and employment growth have not kept up with the population and GDP growth”. This exposes the McCarthy report and the government’s line of argument as totally false.
The government are making working class people shoulder the burden of the economic crisis and are doing everything they can to protect the interests and profits of big business and the rich. These decisions are based on ideology, not sound economic policy. The government and their neo-liberal advisers are using the cover of the economic crisis to implement changes that they didn’t dare implement during the boom.
It is common to hear working class people say that something has to be done about these proposed attacks – but don’t waste your breath looking towards Fine Gael or Labour. Fine Gael’s Richard Bruton welcomed most of the An Bord Snip Nua proposals and Labour leader Eamon Gilmore supported the idea of 17,000 job cuts in the public sector and said that threats of strike action by unions were “not helpful”.
A fight back against these cuts, new charges, taxes and job losses should be mounted. The trade unions have the power to mobilise hundreds of thousands, bringing together and uniting pensioners, the unemployed, public sector workers, teachers, nurses, private sector workers, and young people in a major campaign of militant opposition to these attacks.
The government have been weakened even further following on from their defeat at the local and European elections by the resignation of the government whip by two Fianna Fail TDs in Sligo over the closure of cancer services. Pressure will mount on this government in the build up to and the aftermath of the budget and they can be defeated as was shown by the pensioners last year. The Socialist Party will be uniting with others on the left and community groups, trade unions and activists to build a mass opposition to these attacks.
The crisis in society has exposed the inability of capitalism to provide a decent life for working class people, but it has also exposed the political establishment and the lack of an alternative. More than ever, there is a need to build a new mass working class party which bases itself on a socialist programme and leads the struggle against the impact of the recession on the lives of working class people.
