Politicians milk it while vulnerable get fleeced

On Tuesday we heard that unemployment across Europe has once again increased and now stands at 26 million souls. Why has it increased?

Could it be that the austerity measures introduced by many governments across Europe have failed abjectly? Our Government — and others — seem unable to make the connection between taking more and more money out of people’s pockets and the subsequent loss of employment. In simple terms it’s because there is less money around to pay for goods and services.

In this country, we know why the coping classes, the lowly paid, the disadvantaged and those unable to stand up for themselves are being savaged by this government.

On the one hand it has, despite pre-election protestations to the contrary, simply accepted all the harsh and ill-advised measures of its predecessor. Billions every year are being sucked from the economy to pay for the sins of professional gamblers and the bankers on whom they relied.

The need for money is further exacerbated by Government’s blanket acceptance of the Croke Park agreement, its failure to implement the escape clauses therein, such as inability to pay because of dramatically worsened circumstances. It is further exacerbated by Government’s inaction on curbing the excessive salaries and pension arrangements of our senior public servants.

In that context, it’s no surprise that our politicians’ own salaries are tied to that of a senior civil service grade. Indeed our politicians’ pension arrangements are even better than those of civil servants. At the end of the day, it all adds up to an awful lot of money.

We can only assume that many members of this Government believe the people of Ireland are so stupid that they do not see when our ministers persist on speaking out of both sides of their proverbial mouths.

On the one hand they tell us, in the words of Minister for Jobs, Richard Bruton, that they have “made a conscious effort to keep tax on work low because of the need to promote employment”.

They tell us they could not introduce a 3% hike in the Universal Social Charge as that would amount to an increase in taxes and they promised there would be no increase in taxes. They also tell us that it would be more difficult to attract companies if personal taxation was higher, although there is no evidence to support this statement. The main driver of foreign direct investment is corporate taxation and a confidence that the corporation can make the required profit, in other words, that it can do business in Ireland.

However, Mr Bruton undermines his own argument when he says “one of the issues people look at is the so-called tax wedge — the gap between what the employer pays and the employee receives”. That gap is created by taxation, pension costs, and the universal social charge. The employee cares not one whit what Government chooses to name the deduction. In effect it is all tax regardless of name. Reducing limits, removing PRSI allowances and even taking property tax from a person’s pay packet will reduce his take home pay. So, irrespective of what Government says, it has increased taxes.

Increasing the Universal Social Charge by 3% for those over €100k would go some way to reassuring those suffering most from these austerity measures that those who can better afford to contribute do so.

We should not forget the memorable words of JFK when he said “ask not on what your country can do for you, but what you can do for your country”.

Unfortunately, it would appear that our politicians and those riding the gravy train have juxtaposed this into “look not on what you can do for your country but rather on what your country can do for you” as they continue to bestow considerable largesse on themselves and their fellow travellers.