The comment of the Labour Party to imposing austerity as part of the next government is increasingly clear. In agreeing to the target of reducing the budget deficit to 3% by 2014, Labour is pledging to implement cutbacks and attacks similar to those of the current government.
In interviews over the last weeks, Eamon Gilmore has outlined Labour’s approach to meeting that 3% target. Trying to maintain the illusion of having a different approach to the government, he has raised the prospect of a 50:50 split between cutbacks and tax increases. Although Labour has not formally accepted the government figure of €15 billion of cuts and tax increases over four years, it is likely that their plan ultimately will involve a similar figure.
€7 billion or more worth of cutbacks in the public sector will be brutal regardless of whether it is Fianna Fáil/Greens or Fine Gael/Labour implementing them. Gilmore has said Labour will introduce a three per cent reduction in pay and non-pay costs in the public sector to save €2.8 billion over three years. To put it simply, this means that the attacks on the public sector will continue under Labour. Fine Gael plan to scrap the HSE, sack 20,000 admin staff and privatise the health service! Will Labour support this madness in the next government?
Gilmore has also committed to the introduction of a voluntary redundancy scheme in the public sector, which will mean a decline in the quality of service as well as increasing pressure on those left working in the public sector. This is dressed up as protecting “frontline services”, and being aimed at administrators. However, it is a false argument to suggest that frontline services will be unaffected by cutting the jobs of those who provide the essential support and administrative back-up in the public sector.
Another cutback proposed by Labour is the shelving of the plan to build Metro North. Opposing this plan directly contradicts the formal commitment of Labour to investment to create jobs. Metro North has the potential to create 37,000 jobs, including 4,000 direct jobs in the construction phase. Instead, Labour, wedded to the same neo-liberal economics as Fianna Fáil and Fine Gael, is in favour of the short term saving of €2.5 billion, while spending hundreds of millions on social welfare payments for construction workers and €50 billion on bailing out the banks.
The increased tax component proposed by Labour will also primarily hit working class people. While Labour is proposing a small increase in the income tax rate for higher earners, any suggestion of an increase in corporation tax is absent. That is because Labour has accepted the neo-liberal logic that says that corporation tax cannot be touched despite it being one of the lowest in Europe.
The commitment by Labour to introduce water charges is particularly significant and shows their true colours.
Labour’s entry into government comes closer by the day. Those who have illusions that Labour will represent a real change will be sorely disappointed by the policies they will implement. We need to prepare now to build mass campaigns against water charges, cutbacks and other attacks regardless of who is in power after the next election.