Joe Higgins TD's Budget speech

national | miscellaneous | news report Friday December 06, 2002 00:37 by OK - SP

Here is the budget statement of the Socialist Party delivered in the Dáil on Budget Day.

The budget is a continuation of a process, in train for a decade and a half, of distributing the wealth in society between the various classes, between on the one hand the majority, comprising working people and on the other hand, the minority, comprising the privileged owners of capital and finance. In 1987, wages and salaries of workers amounted to 59% of GDP while the profits and rents taken by the minority amounted to 41%. Fourteen years later, in 2001, the amount going to the workers had fallen to 46% of GDP while profit and rents had risen to 54%. There has been a huge shift in resources from the majority of working people to the minority who benefit from profits, rents and dividends.

This change reflects the philosophy of the Fianna Fáil and Progressive Democrats Government. The Minister for Finance is a conscious right wing politician who has set out, deliberately and with cold calculation in this budget, to continue the trend of shifting resources to the capitalist minority away from social services and working people. Last year he reduced corporation tax from 20% to 16%, at an annual cost of €329 million. He also reduced employer's pay related social insurance contributions by €340 million in a year. The combination of these two figures amounted to €676 million last year. The further reduction in corporation tax announced in the budget means that an additional €305 million will be taken from the tax net and given to the corporations. With the changes announced last year this means that every year from here on, just under €1 billion will be taken from the social fund, which should be allocated to services and to fund the needs of the majority, and given to the minority, who cannot believe the profits they made over several years in the days of huge economic growth.

The treatment of the corporate sector should be contrasted with that meted out to ordinary working people. Take those who have been hoping to purchase a home and put a roof over their heads, a basic human right. The abolition of the first time buyer's grant was a cruel blow by the Government, reflecting the heartlessness of the right wing ideologues who drive policy. For five and a half years they have done virtually nothing while speculators and developers have profiteered outrageously by doubling and trebling the price of a home to working people and in making massive profits. At the same time workers' wages have been pegged under the misnamed partnership agreements.

I have no doubt that many of the speculators who have been let rip have contributed to Fianna Fáil. However, the Minster's response was to injure the first time buyer with the abolition of the first time buyer's grant. In the budget he insulted them. The effect of the so-called increase in mortgage tax relief for them amounts to between €10 and €12 per month. They could not buy a doorbell with it, which is perhaps as well for the sake of the Fianna Fáil and Progressive Democrats candidates, who in a year and a half will be seeking votes. The increase in the lower rate of VAT will add at least €2,000 to the price of the average home. These combined measures effectively amount to a further take from young people as they attempt to purchase a home.

Nothing has been done to alleviate the plight of those depending on private landlords. A significant section of the landlord class now rack-rent with a vengeance that would put their landed counterparts in the 19th century to shame. A mass movement led by Michael Davitt was needed to sort them out. A modest three bedroom home in a working class suburb now commands a rent of €1,500 month, yet no relief is available to the sector.

However, there is continued relief for those who have been privileged to live under the tax shelters and who have been protected for decades by successive Governments. Over the past five years I have repeatedly raised in this House the scandal of the stud farm industry, which has escaped any kind of substantial taxation. I was going to suggest that the stallions in Kildare would sleep easy in their stalls tonight, but they probably will not sleep because they will be disturbed by their millionaire owners celebrating another budget which has not laid a finger on them. No doubt the champagne will flow late into the night in tribute to their Minister who has protected them once again. We have the spectacle of a single horse in a prestigious stud farm, perhaps Sadlers Wells, earning €250 every time it covers a mare, one animal earning €20 million, at a conservative guess, in a year. In the prestigious stud, Coolmore, where there are dozens of such horses, hundreds of millions of euro must be earned with not a cent paid in taxation.

Every morning, working class women from Dublin west and from working class communities in cities and towns, in the black winter morning long before dawn, drag themselves from their beds and make an often long trek to offices and factories to clean them before the day staff arrive. They do this to earn some money in order to maintain their families. Every cent they earn is taxable and if they earn the minimum wage they will still qualify for PAYE as the Minister has refused to remove them from the net in today's budget.

There is a double whammy suffered by the PAYE worker. The owners of these tax-free stud farms are tax exiles in many cases. They are millionaires who fly in at the weekend in their private jets from their luxury retreats in Barbados or Switzerland or wherever. They fly by helicopter to their tax-free stud farms, swan around at prestigious horse races with often a Taoiseach or a Minister for Finance tugging at their arm. They will often show up at their favourite charity event because they all have favourite charities; it makes them look quite good. If they paid their taxes we would get ten, 20 or 30 times more for necessary services than their so-called charitable endeavours earn. The reality is they continue to be protected by this Government.

Successive Governments have dealt shamefully with the funding of local authorities. In the 1980s there were savage cutbacks and in 1983 there was the double cross of the possibility of local authorities raising service charges for water and refuse as a parallel tier of local taxation again hitting PAYE workers. Happily the outraged among the PAYE sector and their demonstration of people power in the 1990s forced the abolition of the hated water tax . That was an important reform because otherwise we would now have a parallel tier of taxation with charges of perhaps €100 per year for the average family or household. The Minister for Finance would like that.

As a result of the cutbacks in real terms in spending on the local government fund, we have new pressures on local authorities to raise charges. Bin taxes are going through the roof. Be warned, I say to the Government. There is a movement of mass opposition in Dublin which is spreading and will intensify if this pressure continues.

There are all kinds of extra taxes under different guises which have been imposed today on working people. The charge on bank cards, the tax on drink and cigarettes, are all extra ways to soak more from working class people. Let us not pretend that they are imposed for health reasons.

There are resources in this society but we have a Government and a system which considers those resources untouchable because they belong to the most privileged layer. We have a Government that preaches prudence and care with public funds but it hands over our fabulous natural wealth in the Corrib gas field to multi-nationals without a single cent being charged in royalties. Yet students at a difficult time in their lives are hit with registration fees in an attempt to bring back full fees. This budget is saturated with the right wing values of capitalism, with the class interests of capitalism which Fianna Fáil and the PDs represent. It is saturated with the values of globalisation and favouritism for the very powerful. Working people should resist it. Leaders of trade unions who have been too cosy in their dealings with the bosses and the Government should be forced to resist it so that we get back the amount of wealth that has been transferred from working people to the super wealthy. There will be no return to the 1980s and the programme of cutbacks of that time.

I counterpose to the rich person's philosophy of Fianna Fáil and Fine Gael a society that is democratically owned, controlled and managed, where the resources are for the benefit of all, not for the tiny minority. In that democratic socialist society, as I see it, we can have dignity, equality and enough for everybody.

Sa mbuiséad seo chímid arís fealsúnacht na heite deise i bhFianna Fáil agus na Daonlathaí. Claonann an Rialtas i dtreo an mhionlaigh is saibhre agus is cumhachtaí, i dtreo na gcomhlachtaí móra agus le cúig bhliain anuas tá na socruithe céanna déanta ag an Rialtas - saibhreas an mhionlaigh seo a mhéadú agus é a thógáint ón ghnáthdhuine.

Tá sé in am deireadh a chur leis, seasamh suas in aghaidh an Rialtais seo agus in aghaidh fealsúnachta de chuid na heite deise a bhaineann leis. Tá sé in am don lucht oibre, daoine óga agus mic léinn a theacht le chéile chun cur in aghaidh an Rialtais seo agus fealsúnacht, polasaithe agus stráitéis eacnamaíochta de shaghas eile a chur ina áit.