Budget will only serve to hammer the poor and vulnerable

It’s said that when the Chairman of a major football club vows that an under-pressure manager has his full confidence and protection, the Manager should prepare for a hit. Sadly in the cynical world of the Irish political establishment we have an equivalent phenomenon.

In his ‘Address to the Nation’ on Sunday night Taoiseach Enda Kenny said solemnly, ‘we will also do all we can to protect the most vulnerable in our communities – our children, the sick and the elderly.’ Then the very next day when he rose to deliver Part 1 of Budget 2012, the Taoiseach’s Minister for Public Expenditure, Brendan Howlin, announced sickening hits on the very same ‘children, the sick and the elderly.’ The Taoiseach did not apologise for his misleading the nation.

The most important way to react to this Budget is not to lose sight of the bigger picture onto which it is painted. The Budget copperfastens the Fine Gael/Labour continuation, almost to the letter, of the discredited policies of its predecessors, Fianna Fail and the Greens. That policy is to capitulate to the dictates of the speculators in the financial markets that the bad gambling debts of private banks and hedge funds should be transferred onto the shoulders of working people, pensioners, students and the poor in this State. Living standards and public services must be eviscerated in this process.

It is this criminal policy of austerity that this week dictated that people unfortunate enough to have to depend on disability allowances up to 22 years of age will see those allowances cut by thousands of Euro in what must be the most callous measure in the Budget. It dictated that parents with three and more children will have their child benefit cut significantly. It dictated that old and poor people depending on fuel allowances will have those cut significantly.

The Budget represents a substantial betrayal by the Labour Party of substantial numbers who voted for it on the strength of commitments made during the campaign. Students who were promised that Labour would not only not raise the registration fee but cancel a previous increase must feel bitterly short changed as will their parents.

The choice made by Fine Gael and Labour is that it is ordinary people who will continue to pay for the crisis ridden financial markets system. Only the United Left Alliance has highlighted during the Budget process that there are other substantial choices. This relates to substantial assets and financial resources that are in the hand of the very wealthiest people in this State.

The Central Statistics Office has calculated total wealth held in the State, less debts and loans, to come to €458 billion. Credit Suisse, a multinational financial services company, calculated in its 2011 Global Wealth Report that in the Republic of Ireland the top 5% of the population held 46.8% of the wealth. That gives them a total €219 billion in financial and other assets. This wealth is untouched as far as any tax is concerned.

If this wealth was taxed in 2012 at, say, 5%, it would yield €10 billion. This would mean that all the painful cuts inflicted on the poor and low and middle income workers in the Budget would be unnecessary. There are also other sources of income from the wealthiest that could be tapped for resources.

With a progressive taxation policy it would be possible to have substantial assets to invest in emergency job creation in major public infrastructure that could create tens of thousands of jobs and in the process begin to recreate this broken economy.