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Did the Government make the right choices for the social fabric of Ireland in Budget 2012? Laura Hutton/Photocall Ireland

Column The right choices - was this an Irish Budget?

Independent Senator Katherine Zappone argues that the Government succumbed to external pressure to put the requirements of the troika over greater collective recovery and sustainability.

ONE COULD BE forgiven for being concerned that the focus of the multiple cuts that we have heard over these past two days are largely about meeting the requirements of the troika’s external agenda.

Budget 2012 was the first quintessential test of this coalition Government’s ability to bring all of us onto a significantly stronger foothold to generate individual and collective recovery, social and economic sustainability. Within the parameters of EU-IMF-ECB agreement there is scope to make certain choices. The Government decided that Budget 2012 must save €3.8 billion in cuts. While there was pressure to go higher, remaining at the original €3.6bn figure would have demonstrated our government’s determination to re-structure bank debt in the long-term, so that we halt eventually the socialising of losses at the expense of privatising gains.

While we do need policies of austerity up to a point, these are being distorted by inordinate efforts to ‘save’ the banks at great personal cost to Irish citizens, and necessarily lead to lower output and lower tax revenues. In my view, it is economic nonsense to believe that someday we will be able to ‘pay it all back’ even if the Germans and French insist that we do.

In the context of this extraordinary budget adjustment for 2012 we must ask ourselves what are some of the prime ingredients needed at the macro level, to make the right choices?

In my view, there are at least three. We must take the right amount out of our national budget in order to adjust our way towards fiscal responsibility, strategic investment for recovery and a solid social fabric. The Government chose to cut spending on public services by 58 per cent and increase taxes by 42 per cent. As there are extensive arguments, and evidence referenced, for both the ‘cut more’ formula and the ‘spend more’ formula, I think that it is rational to conclude that this was an ideological choice by Government and one could question whether this choice will lead to a more inclusive as well as recovered nation. Why didn’t the government opt for a 50/50 split? In the absence of irrefutable evidence surely this would have been the fairest, most sensible way to proceed.

Who is holding a cohesive vision of what kind of Ireland we are creating by cutting large chunks of investment in the social fibre of this land?

The ESRI has provided solid evidence that the current VAT system is highly regressive. At 21 per cent we have evidence lower-income households pay a higher proportion of their income in VAT relative to the higher income households. An increase to 23 per cent will hit the poorest households the worst. To make the right choices about this budget I think that Government ought to ensure – through its taxation, social protection and investment decisions – that those with wealth or economic security share more of their resources with those experiencing poverty or economic insecurity. This is the true meaning of equality and fairness.

It is also a solid formula for economic prosperity as countries such as Finland and Norway demonstrate. If income tax is to remain untouched there are other options open to the Government in this respect, for example, the Government could have reduced income tax relief on pension contributions to the standard income tax rate. This could have saved €500m, equivalent to the amount Government may save on the VAT increase.

The focus on monetary and fiscal rectitude has to be balanced with a very clear articulation by our government of the vision for Ireland that we have at this time.

Who is holding a cohesive vision of what kind of Ireland we are creating by cutting large chunks of investment in the social fibre of this land? The articulation of this vision for a new Ireland could include a call, a voluntary call, on those who have enough or indeed who have plenty at this time, to share with those who have least.

I would ask Government to start speaking of an ethical vision that stresses values and that demonstrates that behind all these facts and figures and cuts, that someone is holding a cohesive vision as to what a new Ireland will look like. Furthermore, within the current debate about closer European fiscal union, Ireland ought to bring the following message to the European table – that we will seek closer union only if it means an increase in social solidarity as well as fiscal rectitude.

The Tanaiste has indicated that restructuring of Ireland’s debt will also be raised at tomorrow’s meeting of European leaders. This is an opportunity for Ireland to regain our sovereignty sooner, in time for Budget 2013. We must be able to make the right choices for our future and our society. As the Statement of Common Purpose from the Government’s programme for National Recovery concluded, ‘There isn’t a moment to be lost.’

Read: Two senators nominated by Enda Kenny critical of Budget 2012>

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25 Comments
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    Mute Simon
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    Dec 8th 2011, 6:29 PM

    Of course it was an Irish budget; it took much from those that need most, and took nothing from those that have most.

    48
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    Mute Marcin Wawrzonek
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    Dec 8th 2011, 7:12 PM

    Just one example…three rows of social houses across the street from me…car or two in front of each of them…trips to the post office every week…work?…what for?…we have everything for free…i hope i will see them soon leaving home in the morning to go and work hard, just like me!

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    Mute Aidan Geraghty
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    Dec 8th 2011, 7:28 PM

    Good man. There are jobs out there.temporary maybe. Interns maybe. Free college or fas courses maybe. But defo no excuse to be at home all day

    22
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    Mute Niall Mulligan
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    Dec 9th 2011, 12:26 AM

    Agree wholeheartedly with the Senator – the budget reflects profound ideological choices about the kind of Ireland we want.

    Neither party has outlined any kind of vision beyond balancing the books – this is a massive failing.

    28
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    Mute Alex simon
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    Dec 8th 2011, 7:01 PM

    I think it was a very good budget.. Its not going to impact much on those who are working. There are currently 10,000 jobs advertised in ireland… So jobs there are, i think the budget was a push to get people back to work.

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    Mute Réada Quinn
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    Dec 8th 2011, 10:56 PM

    Alex. When I see the “back to work” slogan used regarding this budget it makes me laugh. Very few employers in their right mind will employ anyone unless absolutely necessary with this proposal for them to pay first 4 weeks of sick pay.

    What are we paying PRSI for again? Oh yeah, for when we’re all on the dole!

    17
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    Mute Niall Mulligan
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    Dec 9th 2011, 12:22 AM

    And even if the 10,000 jobs figure is correct (where are you getting that from, btw?), there are well over 300,000 people unemployed in this country at the moment. And what about the 140 companies that went under in the past month?

    “Incentivising” people to go take jobs that aren’t there, by placing them
    In danger of poverty, pushing them deeper into poverty. Weak justification, given the circumstances.

    23
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    Mute Aidan Geraghty
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    Dec 8th 2011, 7:10 PM

    Well I think was a good budget. There are politics to how the decisions can be made and they did their best. But they should have put a few euro on the fags. That way unemployed people won’t smoke away their social welfare. And don’t tell me unemployed strapped for cash people should have the freedom to smoke blah blah

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    Mute Yosser Hughes
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    Dec 8th 2011, 7:22 PM

    Have you something against the Unemployed then Aidan ?

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    Mute Shanti Om
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    Dec 9th 2011, 2:45 AM

    That’s all very well and good, but you are actually speaking about an addiction. And forcing them to quit is infringing on their rights, whether it’s a silly decision to smoke or not.

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    Mute Denny Cahill
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    Dec 9th 2011, 4:39 AM

    If a person on the dole had a worse addiction like heroin we wouldn want them to spend their dole on it and smoking is no different.. I dont mind paying tax for the needy or for education and healthcare but you can get fucked if you think im paying for someone to smoke 20 a day and live in the local bookies.. Tax the shite out of bad habits I say…

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    Mute Aidan Geraghty
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    Dec 8th 2011, 7:30 PM

    @yosser. I have something against the unemployed smoking my tax money. As stated. Now please stop with your amazingly silly point

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    Mute Réada Quinn
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    Dec 8th 2011, 10:58 PM

    Aidan. You’d never look in the mirror for me and tell the cranky man to stop making his amazingly silly points.

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    Mute Rommel Burke
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    Dec 9th 2011, 12:00 AM

    Can they smoke their own tax money? I’m pretty sure the 14% out of work haven’t always been on the dole.

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    Mute Yosser Hughes
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    Dec 8th 2011, 9:42 PM

    Yeah lads great being on the dole money for nothing ….Working 5 days a week on the black market couldn’t beat it !! You just keep on paying your taxes good lads ….

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    Mute Marcin Wawrzonek
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    Dec 8th 2011, 8:46 PM

    Unemployed because they chose it as their lifestyle?…YES…because they are too lazy?…f..k YES! They feel far too comfortable with the dole coming to their pockets every week and don’t even think about doing anything towards finding a job. Not all of them of course, but surely a lot of them.

    13
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    Mute HELLO SPRUIKER
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    Dec 8th 2011, 5:45 PM

    Es war sicherlich ein irischer budget!!

    11
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    Mute Rommel Burke
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    Dec 9th 2011, 11:25 PM

    enjoy! :)

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    Mute Tom Neville
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    Dec 9th 2011, 5:04 PM

    Bitterly disappointed to hear Dr Zappone on with Ivan Yates during the week. Dr Zappone talked about how great the Seanad was but guys like me (taxpayers) have no say because I went to the “wrong” university. Another taxpayer (a friend who happens to own and run a shop, and is doing so very successfully during a recession) who pays a lot more tax than I do gets zero say because he didn’t go to college. Another friend, a supremely intelligent guy doesn’t get a vote because he got his degree (a First Class Honours) at Baliol, Oxfod. It is a bit rich cribbing and moaning about inclusiveness when you are happy to partake in the most obscenely undemocratic instituion imaginable.

    Huge respect for gay rights work, but the fact that Dr Zappone went out of her way to say how great the Seanad was makes my blood boil.

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    Mute Eric De Red
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    Dec 19th 2011, 9:57 PM

    Dump the euro

    Balance the books

    Problem sorted

    Ooops! One small problem. The public sector might have to take a pay cut. I guess we will just have to make our children pay instead. Simples.

    1
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    Mute Aidan Geraghty
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    Dec 9th 2011, 10:16 AM

    @Rommel the country is in debt. If you can find their own tax money you are some man. Otherwise cop on

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    Mute Rommel Burke
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    Dec 9th 2011, 12:09 PM

    @Aidan
    Can civil and public servants smoke? After all you’re paying their wages too. Or are they exempt because they contribute tax? The majority of the unemployed have contributed plenty over the years too you know. Why not hammer drink in the budget too?

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    Mute Aidan Geraghty
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    Dec 9th 2011, 12:43 PM

    @Rommel public and civil service can do what they want with their disposable income. Don’t be so silly. Look, ill spell it out for you like a kids story it might help you: So if you were unemployed, you’re sitting with your partner scratching your head over how you are going to financially cope, and her and your feet are sore from walking through Dublin at the anti budget protest and she turns to you and says ‘Rommel, please give up the fags for a start, that will help, there is too much money being smoked. You smoke twenty a day. That’d sixty a week, a third of your job seekers allowance ‘ ‘why no honey, it’s my right to smoke, I’ll smoke if I want, I’ve worked long enough over the years so I’ll do what I want, so goodnight’

    End of

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    Mute Rommel Burke
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    Dec 9th 2011, 8:04 PM

    “public and civil service can do what they want with their disposable income”, but not the unemployed? Why not? I got news for you, it’s none of your business.
    End of.

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    Mute Aidan Geraghty
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    Dec 9th 2011, 9:00 PM

    @Rommel buddy surely you know that disposable income is that of money left after tax. Unemployed receive allowance, support. Incomparable in my opinion. Anyway have a good Friday night. I’m headin out for a fag

    1
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