The mask has slipped once again as the Irish government reveals its 2020 budget for the rich – Barney Doherty explains.
Minister Pascal Donohoe was initially praised in the Irish mainstream media following the release of his ‘prudent’ budget, but the reality is that it was blatantly class biased, and plans to use the threat of a No-Deal Brexit and the climate crisis to hit workers and the poor.
For instance, the Central bank has predicted that tens of thousands of jobs could be lost if there is a No-Deal Brexit. Rather than taking decisive measures to create jobs, to buffer the impact, Donohoe has used the crisis to benefit it his rich friends.
Relief for the rich
€80 million, in a full year, will be given to support small business and agriculture. Instead of tying any such grant to a guarantee that jobs will be retained, Donohoe is giving handouts to company executives.
Using the cover of Brexit, he plans to extend the notorious Special Assignee Relief Scheme which allows company executives who earn more than €75,000 a year to cut their tax bill by 30% when they gain over that figure. This scheme was due to be phased out but it is now extended until 2022. And he is committed to giving more tax breaks to companies who pay their executives in share options through a Key Employee Engagement Programme.
Also contained in the Budget are tax reliefs to high-flyers who travel back and forth to countries like China. Just 144 people availed of this scheme in 2014, gaining a tax break of up to €35,000 each.
And finally, Donohoe plans to give tax relief to bookies so that they can avail of €50,000 in relief from paying a betting duty.
Hitting workers and the poor
In a disgusting move, whilst at the same time dolling out tax breaks for the wealthy, Donoghue’s budget has stopped a 30 cent increase on the minimum wage. He is making the workers who get just €9.80 an hour bear the cost of the Brexit crisis.
The Living Wage Technical Group have calculated that the Minimum Essential Living Standard that will provide a Living Wage in the South of Ireland is €12.30 an hour. €9.80 was already pitifully low, but the fact that the Minister has turned down the opportunity to give people a decent wage is even lower.
The situation is compounded by the reality that a No-Deal Brexit could lead to higher prices. Any government which cares for its people would have given tax relief to workers instead of big businesses and executives. But Donohoe has not given a penny to PAYE workers. His priorities, therefore, are clear.
PAYE workers are currently paying €8 billion more in taxes than they did before the economic crash. This has occurred because of the introduction of the USC tax and the reduction in tax credits.
Pascal Donohoe had the opportunity to put money back in their pockets so that they could afford any potential hike in prices – and also help to keep an economy going in the event of a No-Deal Brexit. But instead, he chose to look after his wealthy friends instead.
Pensioners in Ireland were also handed the short stick in this budget. Often those who find themselves in dire poverty, it’s no doubt many would have hoped that they would see an extra €5 a week, at least, to help them through – particularly as winter and the renewed threat of fuel poverty rears its ugly head. But Donohoe seemingly didn’t share concerns of their plight.
Neither is there any bump for carers or people with disability – despite the fact that there are notorious waiting times for assessments, and even though this is against this government’s own laws.
The Slainte care report is estimated to cost €3 billion in capital funding and €2 billion in extra running costs, in order to move to a one tier health system. What, then, has Donohoe’s budget offered? A measly €20 million for implementation. Far below what is necessary.
Climate change hypocrisy
The government’s only budgetary answer to climate change is to slap an extra €6 tax on each ton of carbon. This means a 2 cent per liter increase on the price of petrol and home heating oil.
Donohoe has made it clear that this is only the start of tax hikes on ordinary people will last until 2030. By the time he has finished, many will be paying an extra €500 to €1,000 a year in tax.
Donohoe claims that this will be an incentive to change behavior, reducing carbon output and tackling climate change. But there is already a carbon tax on petrol – and the numbers of cars on Irish roads has doubled.
In fact, Ireland is one of the most car depend societies in the world because investment in public transport is so low.
And in particular, Dublin has the highest bus fares in Europe – double the EU average. There are not enough buses because 300 were cut from the fleet by the last Fianna Fail-Green government.
In rural Ireland, public transport is almost non-existent outside the main towns. Yet there is no attempt in this budget to rectify the situation, providing investment in public transport in order to get people out of cars and tangibly reduce the amount of carbon being pumped into the atmosphere.
Further, Fine Gael’s gross hypocrisy on climate change is shown by the fact that they refused to put an aviation fuel tax on companies like Ryanair. Such a tax could have raised €900 million and provide resources to move to free public transport.
They are giving relief from the carbon tax to those who use agricultural diesel – while slapping it on those who must use cars.
They are giving relief from the responsibility of carbon production to those who bear most responsibility for producing carbon, and punishing those who often have no access to an alternative, carbon free lifestyle.
And of course, they are blocking all measures that would actually leave fossil fuels in the ground, particularly in their active blocking of Brid Smith’s bill which would seek to do exactly that.
Just like on Brexit their aim is to make the poor pay for the crisis.
The need for green jobs
With the potential for a No-Deal Brexit and the climate crisis, we needed a radical change of policy to create tens of thousands of green jobs.
Irish homes are among the least energy efficient in Europe so a massive state-run retrofitting programme in necessary, and since our electricity is far too dependent on fossil fuels, we will also need the kind of public investment in alternative renewable energy. Both of thses measures would create thousands of jobs.
Thousands of jobs could also be created if a publicly owned building company was set up to construct social and affordable homes, eradicating the national housing crisis.
And the reality is that there is plenty of money available to fund programmes like these – if only we had a government that was not beholden to the rich:
- We could stop spending millions on legal fees – and take the €14 billion that Apple owe us in back taxes.
- We could stop the banks we bailed out getting away with tax free profits. If we closed the loopholes they gained from past losses, we could raise an extra €900 million.
- We could introduce a wealth tax and higher income taxes for those earning over €80,000 a year.
All of these measures would provide real answers to the twin crises of Brexit and climate change, and indeed that of the housing crisis. Donohoe and his Fine Gael cohorts, however, have crafted this budget to use these crises to pursue his blatant class agenda – punishing ordinary people while giving his wealthy friends extra backhanders. It would be shocking if it weren’t so horribly predictable.
