Labour TDs hold out for U-turn on cuts

Labour TDs and rebels within the party share a resigned view of the budget measures but some hold out hope for some type of U-turn on the more significant cuts unveiled.

Some members from the smaller coalition party want a quid pro quo for their constituents having to stomach some of the harsher measures from budget 2013.

However, amid accusations that the budget is mean spirited, Labour TDs look likely to stand by the cuts and savings announced.

Dublin South East’s Kevin Humphreys said the budget was difficult but as fair as possible.

“You have to look at the budget as a whole package. Child allowance [cuts] are very difficult for Labour.”

Monthly child benefit payments will be reduced by €10 for the first and second children, €18 for the third, and €20 for the fourth and subsequent children.

The property tax — while not being introduced until the middle of next year — could also make it difficult for TDs to keep their seats, said Mr Humphreys.

“It will make it difficult for Labour to win two seats in Dublin South East. But you can’t start unpicking a budget, unless savings can be found elsewhere.”

Dublin West’s Patrick Nulty said Labour backbenchers needed to push for a reversal of some measures in the coming days. He lost the party whip after last year’s budget when he voted against some measures.

“It was socially unjust. The child benefit [cuts] were totally unacceptable. Middle income families will pay the price and are already paying up to a €1,000 a month for a crèche place. It went against a Labour party commitment not to cut it. There’s time between now and the bill to reverse the cut.”

While TDs this week voted on measures in the Dáil such as increases in excise on cigarettes and alcohol, the tougher cuts will be put to them over three days next week as part of the Social Protection Bill.

Some Labour TDs said that backbenchers would support the Bill.

Willie Penrose said voters needed to see progress on other economic issues if they were expected to accept the €3.5bn in cuts and savings announced.

“It’s difficult, but try and secure an alternative? Psychologically now, it’s important that some kind of deal on our debt is done with the ECB.

“The acid test would be though what if Labour was not there? Then there would be social welfare cuts.”

Former Labour minister Roisín Shortall, who recently resigned her position, said that reality for party TDs would kick in over the weekend as constituents confronted politicians.

The former junior health minister said there were alternative choices to make savings that would not impact on the less well off.

“It was regressive and treated people the same whether they’re rich or poor.”

The Dublin North West TD said the Government could have introduced a temporary “solidarity tax”, a levy of 5% on incomes over €100,000. Other alternatives would have been a third rate of tax at 48% for high earners or hiking up the universal social charge for high earners. The last option would have raised €200m alone, she claimed.

She said that changes to PRSI, which will see nearly all types of workers pay a weekly €5 charge, would be a “slow burner” and that the property tax would be viewed as anti-Dublin.

“Only today will it dawn on people that some of the measures are desperately unfair.”

Budget ’14

The Government believes the toughest is behind it after this week’s €3.5bn budget package of spending cuts and tax hikes, which will mostly kick in next year.

But another €3.1bn of spending cuts and tax hikes has to be found next December to take effect in 2014.

As the two highest spending departments, the Government again expects social protection and health to make the biggest cuts.

The following is how much the Government expects to cut from current, or day-to-day, spending in each department in 2014:

Agriculture: €28m;

Arts: €15m;

Children: €8m;

Communications: €7m;

Defence: €2m;

Education: €61m;

Environment: €39m;

Finance: €13m;

Foreign Affairs: €24m;

Health: €207m;

Jobs: €16m;

Justice: €135m;

Public Expenditure: €11m;

Social Protection: €613m;

Taoiseach: €12m;

Transport: €56m.

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