Budget fallout - Cuts will nullify hope for economy

In the aftermath of Budget 2013, there are genuine grounds for fearing that provisions intended to stimulate the economy will be nullified by the severity of cuts that will take around €1,000 from the average family income, money that would otherwise go into the tills of high-street shops.

As a result, jobs are expected to be lost in cities, towns, and villages across the country where hundreds of companies have already gone to the wall.

However, before turning to the wider economic repercussions of a raft of swingeing cuts, public interest demands comment on the 19% slashing of the respite care grant. Only an insensitive, unfair Government would slash that allowance for tens of thousands of carers. They are the husbands, wives, children, and other family members who opt to look after loved ones unable to fend for themselves. Due to their selfless dedication, savings to the State are counted in billions of euro, money that would otherwise have to be found within the ailing health system in order to provide such care.

No matter what any minister, Labour or Fine Gael, may claim, those cuts are unfair, unacceptable, and utterly beyond justification. The plight of carers was graphically illustrated yesterday by the case of a woman who uses a wheelchair who looks after her disabled mother at home.

For them, cuts will mean no longer affording the taxi fare that gives them a break from their grinding situation. The argument for revisiting this offensive cut is compelling but the case for dropping it altogether is absolutely overwhelming.

Not surprisingly, other controversial measures, including cuts in child benefits, the back to school allowances, and the property tax, are topics of heated debate. The Government stands accused of being mean-spirited. However, the difficulty facing opposition parties is that Fianna Fáil will never be allowed forget their role in an economic crisis which brought the country to its knees. Likewise, Sinn Féin’s criticism of the property tax will be viewed in the context of the party’s compliance with an even higher property tax in the North.

With another huge budget looming next year, there is no guarantee the kind of growth anticipated by Finance Minister Michael Noonan will materialise. Indeed, his optimistic forecasts go beyond the predictions of other commentators, including the ESRI.

It is hard to see the domestic economy growing when the majority of people will have €1,000 or more taken out of their pockets. With families already stretched and struggling to make ends meet, this will have a negative impact on the homegrown economy. Is Mr Noonan basing his hopes on expansion in the export economy? Shaky ground on which to formulate policy.

One cannot exaggerate the problems confronting families mired in negative equity and mortgage arrears and now facing the prospect of losing out substantially as a result of the child benefit cut, forking out €300 or €400 in property tax, paying €300 in PRSI contributions, and funding higher motor tax and Vat.

The loss of so much disposable income to the economy will have enormous consequences for next year when the beleaguered people of Ireland will be hit by the seventh austerity budget in succession.

The hairshirt has replaced the shamrock as Ireland’s national symbol.