Government formation: Borrowing and spending cuts among the issues Labour want addressed

The letter, penned by newly installed leader Alan Kelly sets out five questions around spending, public sector pay and taxation.
Government formation: Borrowing and spending cuts among the issues Labour want addressed

The Labour Party have asked for further clarification on spending plans by Fianna Fáil and Fine Gael in relation to government formation.

The letter, penned by newly installed leader Alan Kelly, but formed by responses from his parliamentary colleagues, sets out five questions around spending, public sector pay and taxation.

  • How much are you prepared to borrow in 2020, 2021, and 2022 respectively to maintain public services and to secure additional investment?
  • What taxation measures are you prepared to consider, and how do you propose to guarantee that you can implement a radical programme for government over the next five years without increases in taxation for high earners?
  • What spending cuts to Departments and agencies, relative to the allocations made in the 2020 estimates, are you considering?
  • Will you honour the current public sector pay deal, and what is your approach to negotiating follow-on agreement, including equality of pay and conditions for our Defence Forces?
  • Will you commit that the Covid-19 pandemic unemployment payment will continue at the current rate for workers who have lost their jobs in affected sectors?

The letter states that an understanding of the approach from Leo Varadkar and Micheal Martin's parties to future budgets will "provide the Labour Party with the framework to consider the compatibility of our vision for Ireland’s future with what you have proposed".

TDs within the Labour Party have made it clear that they do not believe Ireland will be able to undertake a fair economic recovery, avoiding austerity, post-pandemic without taxes on the highest earners, a move that Fianna Fail and Fine Gael have already ruled out.

The letter also notes that the framework document, released to smaller parties last week in an effort to tempt them into a government coalition, also raises fundamental questions about national policy direction in several areas.

The party have identified 21 principles they believe would need to be rigorously addressed.

The list includes the existence of the for-profit private healthcare system, which they label as "deeply unfair, inefficient" and must end, to make way for the implementation of the Sláintecare Report, as well as insecure work, a living wage, trade union representation, a new home building programme on publicly owned land, State provision of childcare, citizenship by right and a Direct Provision "made more humane and person-centred", as well as promises on a just transition to meet climate goals.

The addition of the six votes of the Labour Party would not provide enough combined numbers for the 80 needed for a majority in the Dáil.

Any coalition that included the Labour Party would also be dependent on independent TDs, most likely the regional independent group who have already publicly stated they would be happy to enter government.

The letter from Mr Kelly ends: "With that in mind, I would also appreciate clarification on how you believe a stable Dáil majority might be achieved with the participation of the Labour Party?"

This query is likely due to the fact that controversial independent TDs such as Verona Murphy and Michael Lowry would be included in such a coalition, which Labour TD Aodhan Ó Ríordáin says would not sit well with Labour membership or parliamentary party members.

"Even if we were minded to go into government," Mr Ó Ríordáin said.

"It still needs another bloc of TDs to go into government, are we going to put Michael Lowry or Verona Murphy into government?

That won't be palatable for Labour, and Fianna Fail and Fine Gael isn't palatable either way either.

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