Dissecting the budget
In their post-budget speeches, the opposition leaders pointed to the most egregious scenario for the country in the wake of the announcement, but Mr Kenny declared that his government’s actions were fair and followed lengthy debates at the Cabinet table.
THE Taoiseach said hikes in direct taxation would be avoided.
“It is vital that in the coming years that tax on work will be kept to a minimum which is why future increases in income taxes will be avoided.”
He said decisions behind the €1.6bn in taxes and €2.2bn in cuts had been made after “long and often complex” debates.
Despite bitter attacks over cuts in child benefit for parents and a 2% hike in VAT for consumers, the Taoiseach insisted the budget had struck the right balance.
“And we have made sure to safeguard our children and young people from the brunt of the cuts,” he said.
The crisis had also presented a chance to reform the public sector, he said, including cutting numbers working, their pensions and state agencies.
Echoing Michael Noonan’s comments that the government would model itself on the Fine Gael-Labour coalition that helped rebuild the economy during the 1990s, Mr Kenny said: “Returning the public finances back to good health was the ultimate legacy of the former Rainbow coalition. It created the sold base from which the Celtic Tiger emerged before it was hijacked by ‘show time’ irresponsible economic policies. Our ultimate goal now is to regain our national sovereignty by maintaining our fiscal commitments in the years ahead.”
Mr Kenny also warned that important days lay ahead for Europe. Measures set out in the budget would help Ireland’s negotiations, he said, adding: “Our ability to effectively represent Ireland on the European stage is greatly enhanced by the actions we have taken at home and abroad.”
THIS budget was the most regressive in years and was deeply unfair and damaging, claimed Micheál Martin.
Mr Martin warned that the measures were not only unfair but potentially inadequate and could leave the Government broke by the middle of next year.
Raising his voice at the Taoiseach several times in the Dáil yesterday, Mr Martin said: “You had choices to make and you are accountable for them. Through the mountain of detail and the hours of announcements what has emerged is a deeply unfair and damaging budget. This budget is the most regressive in years, it will cost jobs, it breaks an unprecedented number of promises made only months ago and it may lead to a serious shortfall in Government revenues as soon as early next year.”
While Fianna Fáil overall supported the fiscal target of savings and taxes of €3.8bn in the budget, the party was critical of the hike in VAT, the severe cuts in capital spending and the failure to target revenue measures at the highest earners.
Mr Martin said the budget cuts would have the biggest impact on poorer groups in society and that Labour ministers had come up with savings that were “deeply mean-spirited and cruel”.
“The proposed cut to payments for young people with disabilities [now put on hold by the Government] is callous and unnecessary,” he told the Dáil.
Mr Martin was also critical of third-level education cuts and the failure to tackle high rents for businesses. He also criticised the language used by Mr Kenny and his ministers in announcing the budget, telling him to stop his pretence and just tell the public when a cut was a cut.
THE Socialist Party leader accused the Government of continuing the policies of the previous government following the economic collapse caused by a “pyramid scheme” led by speculators.
“We have a Fine Gael-Labour Party Government, coming into power promising real change but slavishly following the previous government’s policy.
“That policy has been dictated by the IMF, the EU and the ECB, not to bail out the Irish people but to salvage German, French, British banks and those of other countries from their disastrous and frenzied embrace of Irish bankers and speculators in the Irish property market bubble.”
“In this budget and the past four years the austerity policy means€25 billion has been reefed out of the Irish economy in pursuit of a policy of cringing acceptance of the diktats of the financial markets.
“Can this Government not see that, not only is this immoral and unjust in the extreme, it is decimating the domestic economy?
“As we are tired of pointing out, if we savage the ability of the majority of our people to purchase goods and utilise services, then tens of thousands of workers depending on this demand for their jobs will be thrown on the scrapheap of unemployment and, tragically, that is what happened.”
Compiled by Juno McEnroe
SINN FÉIN leader Gerry Adams argued that the Government’s first budget was devoid of hope and targeted the vulnerable.
Mr Adams described the budget as an “anti-jobs”, “pro-landlord” and “pro-property speculators”.
The decision to cut child benefit for families with three or more children was a massive U-turn by Labour, he said.
On cutting disability payments, Mr Adams said: “You may have paused it for now Taoiseach, but the fact that you chose to take money off the disabled is evidence of how low this Government is prepared to sink and how far Labour has strayed from its socialist and Connolly roots.”
Sinn Féin agrees that €3.6bn is needed in cuts and taxes, but the party differs on how it could have been collected.
Mr Adams was also critical of the appointing of officials to agencies or senior positions. “We now know that it’s still jobs for the boys at the top as Fine Gael and Labour have appointed over 20 people with connections to both to senior positions on state bodies and within the judiciary”
The failure to go after high earners, tax exiles and to reduce the remaining section 23 tax reliefs for investors was also highlighted by Mr Adams.
He said: “You’re happy to forego tax coming into the exchequer by amending these tax measures and to compensate for this you cut child benefit, disability allowance and close community nursing homes. Shame on you.”
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