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Financial Resolution No. 5: General (Resumed)

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Snippet Contents:

Listening to the speeches of the Taoiseach and the Tánaiste, Deputy Willie O'Dea reminded me of the dictum, "I can take any amount of criticism as long as I can consider it unqualified praise."
This budget is the last throw of the dice by a deeply unpopular Government desperate to be re-elected. It is not a budget to shape Ireland’s future but one to help two parties get through an election campaign. Instead of a plan to address deep problems which have developed in recent years, what we have is a series of policy soundbites. This, fundamentally, is why Fine Gael's and the Labour Party’s last throw of the dice will fail. This Government has debased the budget process through its extreme manipulation of figures and its policy of always hiding the negatives.
This year the Government has set a new standard of cynicism in seeking credit for partly restoring cuts which it promised the people it would never make in the first place. Every little did hurt. No matter how successful the Government is at getting its lines covered, the legacy of broken promises and unfair decisions remains. People have had enough of the constant overspinning by the Government. They are sick of the never-ending abuse of language where there is no relationship between what is announced and what is actually provided for on the ground. They have had enough of a Government which has failed to anticipate or address any of the major crises which have arisen in recent years. Most of all, they have come to understand that one can trust almost nothing this Government says.
After six months of hype and stories planted daily in our newspapers, the sum of what was announced yesterday is a cynical budget, full of inflated claims which are already unravelling. It is clear now why Fine Gael was so eager to run to the country in four weeks' time. Its Ministers know the impact of this budget will disappear as soon as people see how many problems are not being addressed, how they have no plans to tackle them and how many of their regressive policies will remain in place.
The budget fails to provide a credible long-term approach to any major problem. For child care, support for the elderly, health, homelessness, education, employment conditions, community development, drugs, rural crime, disability supports or any other important societal issue, the very most that has been announced is a token provision. The shambles and waste of Irish Water did not even merit a passing reference. The horizon is purely to get through election day while all other considerations have been pushed aside.
To listen to the Ministers' speeches yesterday, one would have imagined that everything is fine. The scale and impact of crises which are hurting hundreds of thousands was completely ignored. There was not even a token acknowledgement of the health service shambles, the acute pressures felt by the elderly or the mounting evidence of a two-tiered recovery where some get ahead but too many are being left behind.
The growing cynicism of Fine Gael's and the Labour Party’s budgets is well beyond a joke. They have radically reduced the amount of information available to assess the impact of the announcements. In presenting figures, even the reduction or maintenance of current funding is claimed as an increase. The Minister for Finance, Deputy Michael Noonan, and the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, went as far as to refuse to produce core data on the income distribution effects of budget measures. This information was a basic part of budget documentation for 20 years until they decided it might get in the way of their political claims. All that we get now is their info-graphics showing a part-picture of what happens for a small selection of households. Even including the increase in the minimum wage as a budget measure when employers will pay it, was a claim too far.
The Ministers have done everything possible to hide the true impact of their budgets because their record is one of actively increasing inequality. In every single one of their budgets, the highest benefit has gone to the highest earners. This is particularly true when one factors in the significant impact cuts targeted against the weaker sections of society have. Up to 60% of income earners get below €30,000. That is why this budget is fundamentally lacking in equality.
The speeches of the Minister for Public Expenditure, Deputy Brendan Howlin, are always masterclasses in how to hide reality in a cloud of smoke. Yesterday’s performance was among his most brazen. Clearly, the Labour Party has been hurting from the claim it has supported deeply regressive policies in government. The Minister decided to claim that the Labour Party had, in fact, been incredibly fair. The proof of this is, he claimed, the fact that Ireland has one of the most progressive income tax regimes in Europe. What he did not say is that 100% of this is accountable to budgets introduced by Fianna Fáil but voted against by Fine Gael and the Labour Party.
Every single independent study of budget policy from 2007 onwards has stated Fianna Fáil’s budgets made the wealthiest pay the most, while Fine Gael's and the Labour Party’s have given them the most. The studies also stated the clear majority of budget corrections were implemented before Fine Gael and the Labour Party took office. It takes a peculiar brand of political cynicism to attack people at the same time as trying to claim credit for their policies.
The Labour Party will never get out of the hole it has dug for itself until it is willing to accept the evidence, understood by everyone in this country, that this has been an unfair and divisive Government, obsessed with politics and oblivious to the damage caused by it policies. Every one of the past four budgets was announced with a claim that it was fair. Looking back at some of the claims made, however, one will see Ministers living in a parallel universe where they imagined that nobody would notice the reality of tax after tax levied with no concern for ability to pay. Fine Gael’s obsession with pretending not to have increased tax has been central to this crude, right-wing approach to tax.
This year yet again, the highest benefit has been felt by the highest earners. The tax changes result in a gain of 1.9% for an earner on €75,000 but only 0.8% for someone on €20,000. The Minister did not even try to defend that yesterday. Dress it up any way one wants, but this is not a progressive tax policy. There is still no direct tax relief for parents to help with the huge cost of child care.
One of the innovations this year is for Ministers to claim the minimum wage increase in its budget giveaway figures for households. It is now the official policy of the Labour Party and Fine Gael to balance wage increases paid by employers to the low paid with tax reductions for the highest paid. It was an extraordinarily cynical act. The Government does not pay the minimum wage; the private sector does.