Inspections will allow Brussels propose possible budget changes
The fund has rejected complaints from its former chief of mission to Ireland Ashoka Mody who said the austerity policies were doing more harm than good.
It has meanwhile emerged that Ireland will have to remain subject to regular budget inspections for almost two decades despite exiting the bailout this year.
Mr. Mody had said Ireland should consider scaling back its austerity policies. However the IMF says Mr. Mody no longer works for the fund and his views do not represent those of the fund.
The IMF has suggested it wants a full budget package of €3.1 billion in spending cuts and tax increases even if it is more than enough to meet Irish targets.
The Finance Minister has meanwhile confirmed that Ireland will remain subject to Troika inspections for almost two decades.
Michael Noonan says rules agreed by ministers last year will mean Ireland will have regular visits until it has repaid three-quarters of its EU bailout loans. Under our current timetable Ireland will not reach that target until 2032.
The inspections will allow authorities in Brussels to propose possible changes to future Irish budgets long after the bailout programme ends this December.
This comes amid a call on Finance Minister Michael Noonan to seek the assistance of powerful US stock market watchdog, the Securities and Exchange Commission (SEC), to probe the bank’s activities in the period leading up to the 2008 crash. Anglo Irish Bank sought to raise $10bn in fresh funding off the back of a medium-term bond offering in July 2008.
While the bond itself was not made available for purchase by US citizens, it was offered to qualified institutional investors through an investment prospectus filed with the Washington DC-based SEC on July 17, 2008.
In the course of the prospectus, Anglo Irish Bank provided potential investors in the bond with financial information drawn from both its 2007 annual report and unaudited figures for the period leading up to March 31, 2008.
In a note accompanying the numbers, the bank stated specifically that the information contained in its prospectus was “in accordance with the facts” and did “not omit anything likely to affect the import of such information”.
That declaration and the figures provided by the bank are now open to question in light of damning revelations about the bank’s activities contained in the notorious Anglo tapes published by the Irish Independent and Sunday Independent in recent weeks.
Fianna Fail finance spokesman Michael McGrath last night called on Mr Noonan to ask the SEC to investigate the bank’s activities.
“Looking at it in the light of all the information that has come into the public domain, questions do need to be asked about the quality of the information Anglo provided in the investment prospectus it produced in the summer of 2008 as it tried to shore up its position. It is immaterial whether or not the bank actually managed to raise the funding,” Mr McGrath told the Sunday Independent.
And as we now know from last week’s revelations in the Irish Independent, by November 2007, two of the bank’s most senior officers were already talking about finding an international analyst to try to put a positive spin on Anglo’s rapidly declining finances.
Mr McGrath added: “Given that Anglo Irish Bank filed the prospectus for its $10bn bond in the United States in July 2008, I would ask the Finance Minister Michael Noonan to make contact with the SEC to explore the possibility of an investigation now being initiated in the US. If Mr Drumm cannot be compelled to return here, perhaps he can be called to account in his new home. Such an investigation could be facilitated by our own Office of the Director of Corporate Enforcement (ODCE) given the powers it has under the companies acts to work in co-operation with overseas regulatory authorities. The SEC also enjoys this power.”
Michael Noonan the Minister of Finance said
Ireland is emerging from its economic crisis, Finance Minister Michael Noonan has declared in this opening remarks of the Budget 2013.
“the economy could soar like a “rocket” next year as new figures showed that the country’s goods-trade surplus jumped 20% in January compared to the same month last year”.
The Fine Gael-Labour coalition in Dublin is currently discussing a proposal from Finance Minister Michael Noonan, which imposes austerity budgets until 2020.
Although the programme has not yet been published, government officials have made clear that its purpose is to intensify the spending cuts under the bailout agreed with the European Union, European Central Bank and the International Monetary Fund after the programme expires later this year.
Referring to the dictates of the troika, which have ensured the implementation of a large part of the more than €28 billion of austerity measures since 2008, Noonan said, “When we leave the programme we won’t have that kind of discipline within our system any more and I want to make sure that, because of more loose arrangements, that we don’t lose impetus.”
Specific savings are expected to be outlined by the proposal, and fiscal targets will be included. Spending ceilings for the coming three years are to be presented in the 2014 budget, which will be announced in October.
Minister for Jobs Richard Bruton, like Noonan a member of Fine Gael, was explicit that the government’s strategy would be to step up the downward pressure on labour costs in order to build a “competitive economy.”
“There isn’t a crock of gold that you can dip into and create an alternative to building sound enterprises that are oriented to export markets and who sell innovative products,” he proclaimed.
The Labour Party’s Public Sector Reform Minister Brendan Howlin is playing a leading role in slashing government spending. A letter was recently issued by him to each government department, detailing percentages of budgets to be cut in the years 2015 and 2016. These are thought to include annual savings of at least three percent in the budgets of the health and social protection departments. Other departments could face annual targets of five percent.
The state pension fund will be bled dry to offer incentives to foreign investors and private equity firms to come to Ireland. The Financial Times reported that the remaining six billion euros in the National Reserve Pension Fund would be used by the government to create a “co-investment” fund.
There has been hardly any public discussion on these new developments, which will condemn Irish working people to unending austerity for years to come. These policies will worsen the conditions of misery which already prevail, including an unemployment rate standing at 14 percent.
Essential to the enforcement of austerity is the full support of the trade unions, which the government can be assured of. The Irish Congress of Trade Unions (ICTU) has been locked in talks with the coalition since February to reach an agreement to impose the latest round of savings on public sector workers. The successor to the no-strike Croke Park Agreement between government, employers and the unions, which expires next year, aims to save €1 billion by 2016.
The unions are currently trying to force through the Haddington Road Agreement in the face of widespread opposition among workers. In the first vote on the deal in April, a large majority of workers rejected it, including an overwhelming number of teachers, medical staff and emergency service workers.
The bureaucracy then entered new talks on a union-by-union basis in order to divide the emerging opposition. They accepted as good coin the claim from Howlin that the three year agreement would be the last time workers would be asked to sacrifice their wages and working conditions to pay for the collapse of the banks, even as he prepared to outline with Noonan proposals which will see austerity and labour market reforms continue for at least another four years thereafter.
The deal now being voted on by the public sector unions retains all of the cuts demanded by the government. It contains reductions to overtime pay, longer working hours, redeployment measures designed to cut numbers in the public sector, and the freezing of pay increments.
These measures will exacerbate the exploitation of workers who have suffered significant pay cuts since 2008. In the public sector, average wages have fallen by 14 percent, while in other economic areas it is even more. This has been an integral part of the drive by the ruling elite to permanently lower labour costs. According to one study, labour costs in Ireland fell between 2008 and 2012 by 8.4 percent.
On this basis, the Irish stock market is achieving its largest rally since the crisis. Stock values have more than doubled since a low point in early 2009, and companies are predicting that they will secure their biggest profits since that time. One trader bluntly pointed to the source of these renewed gains, telling Bloomberg, “We have to give Ireland credit for actually sticking to the reform programme and taking the levels of painful social adjustment that few countries in Europe have come close to.”
The continued expansion of profits is unsustainable, and there are already clear signs of the danger of another banking collapse. Last week, it was revealed that €3.5 billion of funds loaned to Allied Irish Bank during the near collapse of the banking system in 2008-09 would not be paid back to the state, but would be converted into preferential shares. One press article pointed out that this one move would see the state lose more money than the total savings it had planned in the 2014 budget.
The banks will likely require access to even more financial support from the government, another important factor driving the cuts. Noonan discussed this possibility at his last meeting with the IMF, in the event the banks fail stress tests scheduled for early 2014. The tests, initially planned for autumn 2013, have been pushed back amid concerns over the stability of the banks. Fitch released a report this week stating that “significant risks” still remain in the financial system.
In the absence of agreement within the European Union on allowing the EU’s bailout fund to lend directly to banks, Dublin would be faced with taking even more debt on to the state balance sheet in order to cover the capital requirements of the financial institutions, under conditions in which state debt is already greater than 120 percent of GDP.
In an ominous report released at the end of May which indicates the scale of the developing crisis, Ireland’s Central Bank pointed out that a total of €25.8 billion of mortgages were in arrears by more than 90 days, and small businesses had fallen behind with payments on loans totalling €10.8 billion. The banks have only €9.2 billion in capital to act as a buffer.
While the banks can expect to obtain full access to billions more in state resources, the latest figures point to a sharp rise in severe poverty. One in ten are suffering from food poverty, defined as an inability to afford a meat or vegetarian equivalent meal every other day, or having missed a meal over a period of two weeks because of money problems. The real number of those living under such circumstances is certainly much higher, since the figures from this report were collected in 2010. In a separate study, the Irish League of Credit Unions revealed that almost 50 percent of the population have to borrow money to meet the cost of basic bills.
The Central Bank headquarters in Dublin (File photo)
NEITHER THE DEPARTMENT of Finance nor the Central Bank will release the so-called ‘Black Book’, a crisis management manual intended to assist officials during financial crises, which was never used during the bank crisis five years ago.
The ‘Black Book’ is referred to in the Nyberg report into the causes of the banking crisis which led to the fateful guarantee of Irish banks in September 2008. The report notes: “In the actual crisis no use was made of the Black Book procedures.”
The manual lays out procedures for emergency funding from a Central Bank or emergency liquidity assistance (ELA), guidance on legal issues related to insolvency processes and providing state aid to industry, and information on how to contact the responsible persons in a crisis.
It has been in existence since 2001 when it was prepared by the Central Bank of Ireland to provide for a set of processes and procedures to refer to during the management of financial crises.
But it was never used when Ireland’s banks were plunged into crisis at the back end of the last decade resulting in the eventual guarantee of all liabilities of Irish banks at an eventual cost of €64 billion, a move which later resulted in Ireland needing an international bailout.
The manual was referenced in a parliamentary question from independent TD Stephen Donnelly this week.
Donnelly asked the Minister for Finance Michael Noonan if he would release a copy of the ‘Black Book’ as it existed at the end of 2006 or as it was redrafted in the crucial period leading up to the banking crisis between August 2007 and September 2008.
Noonan said the manual was passed to the Department of Finance “on the understanding it would be treated in strictest confidence given the nature of the matters treated in the document”.
He described the ‘Black Book’ as a document which lays out a “set of processes and procedures to assist it in the management of a financial crisis situation”.
“I do not therefore propose to provide a copy of the document,” Noonan said.
Contacted this week, the Central Bank declined to answer a series of questions about the document including the content in it, how many times it has been updated and when it was last updated.
A spokesperson said that the document laid out “the principles under which the Central Bank would operate during a crisis; operational procedures and terms and conditions for ELA; legal issues relating to insolvency laws and state aid to industry; and information and logistic issues such as arrangements for contacting the responsible persons in a crisis.”
The spokesperson declined to comment any further.
Anti-Eviction Taskforce- The Wall of Shame
A cause worth supporting. Contributions welcome
The Wall of Shame
Let’s take it as a given that most banks would be featured prominently on any page with this title. So we feel there is no sense in going over old ground. Instead you will find the actions and/or attitudes of individuals highlighted here. Don’t be surprised if this becomes the fastest growing page on the site over the coming weeks and months.
Michael Noonan, in his reaction to the Keane Report, expressed his belief that some people would have to lose their homes. This kind of statement coming from an elected representative shows that he cares not one jot. Some people should just consider themselves expendable.
Threatened a struggling single mother of 3 with immediate eviction if she didn’t somehow come up with €400. Nice chap!
Immediately removed a link to this website that was posted on his Facebook page and then blocked the local man who had posted it there. Mr. Kelly is also engaged in a high court battle against a 70-year old woman and using a private security firm for maximum effect.
Likes to turn up unannounced at people’s homes after normal business hours and try to intimidate them over mortgage arrears. This kind of tactic is becoming more frequent and is designed to try to catch people off guard. NO ONE has a right to threaten you on your own doorstep. If they turn up, stand your ground and send them packing.
Please contact us with any additions you would like posted.
This is a translation of a piece written by Manuel Cañada, a militant in Trastienda, a social rights collective. It was originally published in Rebelión on 30th June last year. A friend from #AcampadaMérida (manifesto here) suggested I translate it as it helps provide the context to the situation in Extremadura. However it has universal resonance, particularly so in countries living in the wake of burst property bubbles.
The discourse of social Darwinism and the ‘the kingdom of the plasma screen TVs’ cited in this translated text on evictions in Extremadura ought to be particularly relevant to Irish readers. This morning, the head of the Department of Finance has declared that it ‘is not necessarily appropriate that banks should be using taxpayers’ money to subsidise people living in accommodation, even if it is a family home, that is beyond their means’, citing an ‘unnaturally low’ level of repossessions (as if there were anything ‘natural’ about a neo-liberal state that protects the financial sector at all costs!). Meanwhile, Michael Noonan the Minister for Finance has cited, on the public broadcaster, the problem of satellite TV subscriptions taking priority over mortgage repayments.
Bailing out banks, evicting poor people
by Manuel Cañada
I ask of the political economists, of the moralists, whether they have calculated the number of individuals it is necessary to condemn to misery, to undue labour, to demoralisation, to infancy, to crapulous ignorance, to unconquerable misfortune, to absolute penury, so as to produce a rich person.
– Almeida Garret
12th of June 2012, in Mérida’s Juan Canet neighbourhood. It is not yet nine in the morning and a group of riot police, armed with plastic bullet rifles, oversee the rapid removal of furniture from a council house. It is one of 16 such evictions carried out in Extremadura in the last month and a half. Expectant rifle sights scan the doors and cots scattered in the middle of the street. A woman, until now a resident of the flat, begs unsuccessfully to be allowed in to her home to pick up the bottle so she can feed her son. No, these neighbourhoods are not reached by the psalms that speak of the greater interest of the child, nor is there room in the suburbs for affectations of compassion. “They treat us like terrorists”, says an older woman, consumed by rage. For some time now we have ceased to be surprised by the presence of riot police and special operations teams in these slums of misery. It is the silent war, the war of the rich against the poor, the coming social war.
One eviction every three days. The Extremaduran regional government (in Spanish, la Junta de Extremadura), a weatherproof homeowner and judge, has let eviction be the guide of its housing policy. 764 eviction cases are open, and of these, we are told, 90 are to be carried out imminently. This is happening in a region with near 150,000 people who are unemployed, with more than 60,000 in receipt of no benefits whatsoever, and when the number of people seeking assistance from Cáritas food programmes keeps multiplying. A tsunami of marginalisation and misery is advancing with its mouth wide open and, while this is going on, the Extremaduran government starts spinning the roulette wheel of eviction. “I only get €436 euro in unemployment benefit and I have to pay €143 in rent. How do they expect me to pay another late payment bill”, says one of the women threatened with expulsion. “They don’t want to apply the rent reductions to me because they say I have previous debts”, another neighbour complains. “Can you believe they have the right to threaten you with getting thrown out on the street for a debt of €800?”. The stories of uncertainty and fear pile up. The regional government, the property owner, mobilises police and judges to frighten poor people, but it does not seem to show the same diligence or energy in fulfilling its obligations as landlord. The lifts stopped working a long time ago in many blocks and the neighbourhoods are filling up with cockroaches, but the exemplary government of Extremadura can only think about making money, and, especially, in that most profitable of investments: fear. The vineyard of the powers that be, always sprinkled with fear.
This institutional abomination of eviction as a political tool occurs in a country that has more than 4 million empty dwellings and, nearly a million of them in hands of banks as a consequence of the mortgage shakedown. Spain, European champion of people without homes and, at the same time, homes without people. The same country where, whilst sharks like Rodrigo Rato or Miguel Ángel Fernández Ordóñez get off scot-free after leaving behind swindles of €23bn euro (Bankia) or financial black holes of more than €100bn (Spanish banking sector), families are turfed onto the street for the serious crime of having ‘illegally occupied’ the dwelling that was in the name of the grandmother of one of the co-habitants. In the autonomous region in which the biggest businessman, Alfonso Gallardo, has still not given back the €10 million he was advanced for the failed monster refinery and where each passenger through the phantom airport of Badajoz costs public funds 37 euro, they still extort people who have nothing so that they pay insignificant arrears, or they cut off the water supply to families with small children.
“No-one is going to sleep in the street”, say the civil servant-politicians from the Extremadura government. And it’s true. In spite of them, beyond the logic of bureaucracy, there exists the humanity of the families who will take them in even though, to do so, 15 people might have to cram in to a dwelling of 90 square metres, as has happened in one of the cases in the Bellavista slum.
“We are not going to stop the evictions, in any shape or form. Furthermore we are being congratulated for it”, says a jubilant Víctor del Moral, the Housing Manager for the Extremaduran government. It is here, in this disturbing argument, where the key to this wave of evictions is to be found. An entire populist discourse which speaks of the most downtrodden slums as the kingdom of the plasma screen TVs and designer furniture, and which grindingly repeats terms such as anti-social behaviour, ending up presenting as a problem of public order what is instead a radical expression of social injustice. Here also, behind the absurdity of collective evictions we can locate the “ancient conflict between rich and poor over the right to the city” (Mike Davis).
In 2005, the revolt of the Parisian banlieues was exploding and Sarkozy was resuscitating the old classist-hygienist argument: “we need a big hose to power blast the scum”. The scum, the trash, the dregs, the lazy and the malingerers, yesterday’s gypos and today’s chavs, the fear of the dark suburb, summoned time and again. And joining the ancient criminalisation of poverty is social Darwinism, imported from the United States and administered by injection during recent decades. There are no longer any poor people, only failures. The marginalised disappeared: in the language of the capitalist jungle only losers and social misfits remain.
A thick complicit silence accompanies the evictions. And the comment threads of newspapers suppurate with hatred for the poor. “It’s the only good thing that the PP has done since it came to power in Extremadura”, says an anonymous dispenser of justice. “Come on, hurry up and kick out the scum, they’ll still be around come winter at this rate”, adds another brave mystery figure. They are the lumpen and anything goes. Those in power are well aware of the fear of proletarianisation among the middle classes and they feed off the anxiety of those who sense the end of the great fantasy ride of consumerism and property-owning individualism. Enríque de Castro, the parish priest of Entrevías, has been speaking for years of a new concept, that of profitable poverty. Since the 90s, many people began to live off poverty in the powerful “industry of the social”. Today it is even more obvious to see the usefulness that power accords poverty as an instrument for cohesion and disciplining citizens.
In Novecento, the beautiful Bertolucci film that narrates the history of the 20th century in Italy, we see the story of the eviction of Orestes, a peasant whom the padrones kick out of his home disregarding the contract. On the arrival of the ‘devils on horseback’, the name given by workers to the police of the era, the peasant men and women take up sticks and spread themselves across the ground to support their comrade and resist the expulsion. “They want to throw us out, come down quick, we need you”, plead the most conscious peasants. From the river, one of the small landholders, out hunting ducks, urges the police to intervene against the protesters: “Get out of here, villains. Boys, you have to teach them that property is untouchable, property is inviolable”. The story of the eviction in the film serves to explain the origin of fascism in Italy. Observing the brutality and inhumanity of the mass evictions happening today and the systematic liquidation of social rights, it seems the belly that bore that bestial thing is still fertile.
Ireland received a significant boost in its bid to seek an extension to the maturities of its bailout loans last night after finance ministers of the countries that share the euro currency backed the deal.
Yum. Tasty carrot.
While agreement has been reached in principle to extend the maturities, the scope and technical detail of how the extension of maturities will be implemented have yet to be worked out. If agreed by European finance ministers today, it will fall to the bailout troika to devise the technical details of the proposal.
Thwack! Keep moving debt-donkeys.
Any bets on what is going to happen in this situation. I have a bad feeling this is leading in the direction of Johnny Citizen.
Will we have a special tax to pay off this installment?
However Mr Noonan said he was “still confident of a positive outcome” to negotiations with the ECB.
He referred to the negotiations as “pussyfooting” and said Ireland should be seeking a write-down of debt, not an extension of the term for paying it back.
Mr Doherty also asked for details of whether the ECB had rejected a proposal, if an alternative proposal would be ready for the next meeting of the ECB board; and what the Government would regard as a satisfactory outcome.
Mr Noonan said it would not be helpful to go into detail, and accused Sinn Féin of positioning itself to reject whatever deal was agreed.
He reiterated his expectation of a deal on the note in the coming weeks and said it was his belief that the Government will get a satisfactory arrangement by the 31 March deadline.
Fifty per cent of voters now feel there is a need for a new political party on foot of broken election promises and widespread disillusionment with the Government, a new nationwide opinion poll reveals.
An undeniable feeling of discontent among voters has fuelled calls for a new party to be established, while angry voters are calling for the Government to rein in excessive pay and pensions in the bailed-out banks.
According to the latest Sunday Independent MillwardBrown nationwide opinion poll, conducted this month, the desire for a new party is strongest among women voters, young to middle-aged voters and those living in Connacht and Ulster or from poorer backgrounds.
Former Tanaiste Michael McDowell, writing in today’s Sunday Independent, says that falling satisfaction with the Government and the fact that the coalition partners have “fallen out of love” are driving factors behind the calls for a new party.
“There is at least 25 per cent of the electorate which would opt for a new party as an alternative to another term for the present coalition and as an alternative to a Fianna Fail/Sinn Fein coalition backed by the remnants of Labour,” he said.
Mr McDowell is predicting that while FG will lead the next government he thinks Labour will not be in power with them, and there is room in the gap for a new party.
“I cannot see any possibility of an overall majority FG government after the next election. It seems to me that many people in middle Ireland would support the formation of a new party which would give Ireland the opportunity to have a new government which would not include the Labour Party,” he adds.
According to the poll, 38 per cent of voters feel there is no need for a new political party, with opposition to the proposal higher among males, those aged over 55 and Dubliners, with many feeling a new party would not be able to offer any real change, given the country’s financial woes and our electoral system.
If don’t knows were to be excluded, a majority of voters feel there is a need for a new party.
When asked what strategies the Government should prioritise in 2013, 50 per cent of those polled said they want the Coalition to be more assertive when dealing with the issue of “bankers’ pay, pensions and lending policies”.
The drip feed of revelations about activities at the top of the banks, which to date have received €64bn of taxpayers’ money in capitalisation, have fuelled calls for more decisive action from Finance Minister Michael Noonan from the elderly and voters outside Dublin.
Voters are also frustrated with the lack of progress in terms of progressing Ireland’s bank debt deal with 23 per cent saying the Government should adopt a tougher approach when dealing with the troika, as a top priority.
Speaking this weekend, Taoiseach Enda Kenny said once the IBRC promissory note is restructured ahead of the March 31 deadline, he is expecting agreement on a deal by June on the cost of capitalising the “pillar banks”.
Mr Kenny said a full deal is not likely until 2014 after the necessary European structures are in place, but a signal will be crucial to enable Ireland to exit the bailout at the end of 2013.
“So while an actual transaction may not be possible until 2014 a clear signal of how this is going to be done will certainly strengthen market confidence and lower interest rates for Ireland,” he said.
– DANIEL McCONNELL Chief Reporte
Even though there are another three years to go to an election, the goose is already cooked for many Labour TDs. By Vincent Browne.
Michael McGrath, the Fianna Fáil spokesman on finance, responding to the budget on 5 December, said: “Fine Gael [in the cabinet discussions] showed that its absolute priority in the budget is to protect those who have most. We are told the Labour Party made valiant efforts to protect households dependent on social protection but, clearly, it has failed.”
Interestingly, at this point, Ruairi Quinn intervened to say: “Not so.”
Even those of us who might be sceptical about Quinn’s denials of having earlier signalled to a parliamentary Labour Party meeting that he had no confidence in Minister for Health James Reilly might be disposed to accept his word on this – ie, that Labour did not make valiant efforts to protect households depending on social protection.
McGrath went on to say: “The price Fine Gael wanted to extract for considering even a modest increase in tax for those earning more than €100,000 was to cut the most basic welfare payments. Fine Gael used the basic welfare payment of €188 per week as a negotiating chip to protect those earning more than €100,000 per year…
“In the face of this resistance from Fine Gael, the Labour Party capitulated and accepted the symbolic fig leaf of a so-called mansion tax that will affect a small number of people and bring in little additional revenue. Principles that are articulated in opposition are forgotten around the table of power.”
It is incomprehensible that the Labour Party would have agreed to break its solemn and much-advertised election promise not to allow any cut in child benefit, let alone this cut – €10 a month for the first and second child, €18 for the third child and €30 for the fourth and other children – and to do so in a way that will cause further terrible hardship to those whom Labour purports to protect.
I suspect this budget debacle was engineered in the first instance by the attempt to stop the flood of cabinet leaks that marked the lead-up to the 2012 budget a year ago, by confining the deliberations to the four ministers on the economic committee: Enda Kenny, Eamon Gilmore, Michael Noonan and Brendan Howlin.
As Kenny and Gilmore are otherwise largely preoccupied, this left just Noonan and Howlin, both practised political disasters.
Noonan almost did in the Fine Gael party a decade ago, while Howlin – admittedly ably assisted by Alan Shatter – managed to lose the referendum on Oireachtas inquiries.
By the time other ministers became involved in the overall schema of the budget, I suspect it was too late to unpick the big decisions – particularly the decisions on PRSI, the household tax, respite care and child benefit – to protect the wealthy from increased charges or taxes. But perhaps this is a naive, benign assumption, and it certainly does not disguise the instinctual response of Fine Gael to the crisis: to afflict the afflicted and cosset the cosseted. Nor does it disguise the instinctual reflex of Labour ministers to remain in office almost at all costs, probably believing that this is somehow in the national interest.
An exacerbation of all this has been the disingenuous Labour claim that the budget involved a €500 million “wealth tax package”, whereas the true figure is €114 million in 2013 and €174 million in a full year, as Michael Taft of Unite has shown. The situation was made even worse by Gilmore and Joan Burton telling us how difficult all these decisions have been – for them.
Róisín Shortall again made a telling point at Gilmore in her contribution to the Dáil debate on the budget. She noted how the tax relief on pensions costs the exchequer €2.5 billion annually, and around 80% of this relief goes to the top 20% of income earners.
Pointedly, she asked: “On what basis does the Tánaiste believe it is any way fair that a person should be able to receive a lump sum of €200,000 tax-free? What is the basis for continuing with a regime, given that many thousands of taxpayers and others, who cannot afford to make pension provision for themselves, are in effect paying for the significant tax-free pension lump-sums of some of the wealthiest people in the country?”
It is all very dismal for Labour – made all the more so by Mario Draghi, who made it clear on 6 December that it is very much Frankfurt’s way, not Labour’s way, as far the €30 billion Anglo promissory notes are concerned. Even though there are another three years to go to an election, the goose is already cooked for many Labour TDs.
But there is a modicum of hope.
Tom O’Connor, the political scientist, has shown evidence that a left-leaning majority might be emerging (including Labour among the left). He notes that, in 1987, the left was at 15%, in 1997 at 24%, in 2007 at 25%, in 2011 at 40% and, according to the Red C poll in the Sunday Business Post on 2 December, at 43% now.
It is not entirely improbable that the left (Labour, Sinn Féin, United Left Alliance and left-leaning independents) will be close to 50%.
That might be interesting – or it might, once again, be more of the same.
Image top (the Labour Parliamentary Party at the beginning of the 31st Dáil, in March 2011): The Labour Party.