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Three card trick

Coalition budget strategy for austerity meets little resistance

25 October 2021

Minister for Public Expenditure and Reform Michael McGrath (left)
and Minister for Finance Paschal Donohoe hold the Budget 2022 documents.

The Dublin government's budget 2022 was immediately derided by one opposition TD as "National €5 day". The suggestion was that it was a vacuous do-nothing budget focusing on minor handouts and aimed at bolstering government, stymying Sinn Fein and distracting from the coming period of austerity as Covid payments are phased out and the workers are asked to foot the bill.

There's a lot to be said for that view.

A traditional double week Xmas bonus for welfare recipients will continue.
A National Childcare Scheme universal subsidy is extended to all children aged up to 15.
A €5 increase in weekly social welfare payments.
A €5 increase in weekly payments for pensioners.
The Living Alone Allowance to be increased by €3.
Fuel Allowance increased by €5.
Parent's Benefit increased by 2 weeks to 7 weeks from July 2022.
Introduction of a Youth Travel Card for those aged 19-23.

More general announcements on health and education involve more substantial payments, but in all cases fall far short in terms both of funds and in structural changes.

This was most clearly illustrated in housing, 11,820 new social homes are promised, but only 9,000 of these will be new build homes, a wildly insufficient number. The word social disguises massive funds for private developers. In addition, yet more funds are aimed at landlords in promises of further housing subsidy.

As before, the Green agenda is expressed through further charges of workers in the form of carbon tax. Any fundamental reorientation of the Irish economy is avoided.

But the discussion is framed by what's not in the budget.  The formal announcement is the third leg of a tripod that defines overall capitalist strategy.

The first strand was the "Housing for All" policy, published earlier. This commits billions for housing but is a gigantic con. The whole purpose is to guarantee a return to speculators and vulture capitalists. There is almost no genuine public housing and even the restraints of affordable rents and tenants’ rights are absent.

The second strand was agreement to an international standard corporation tax of 15%. The deal was a triumph for the government, with guarantees that there would be no further increases in the tax and the ability to retain the old 12.5% rate for smaller local firms.

The third strand is the budget itself, attempting to put a positive gloss on a coming period of austerity and detract from the overall thrust of government strategy.

The main budget response came from Sinn Fein. It was a standard opposition statement: routine denunciation with little in the way of alternatives.

Mr Doherty told the Government benches in the Dail that it was “out of touch, out of ideas and out of time”.

Never has so much been spent to achieve so little.

“Energy prices are spiralling and your plan is to increase them further with carbon taxes.”

He added that housing prices and rents are out of control and said the Budget lacked measures to reassure families.

It should never be normal, he said, that people are paying nearly €2,000 a month in rent in Dublin.

“We heard more of the same,” he said.

“It needed to be a Budget for change.”

Sinn Fein claim that they do have an alternative housing plan. Costs could be reduced by using public land and eliminating the developers, but this, as with all other reforms, rests on financial support from the European Central Bank.

People Before Profit concentrated on a fantasy football league statement that lists all the wonders they could achieve in government.

Most significant of all is the statement from ICTU.  There was no statement from ICTU.

The lack of resistance becomes even more striking when we take the three strands of government policy. The budget met routine opposition. Housing for all saw housing protests cancelled. The reactionary corporation tax deal was met with silence.

So why is this? A major factor is the long period of social partnership between government and unions. ICTU did not protest the new measures because they had a role in framing them and considered the outcome the best deal possible. Another factor is the pivot by socialist groups towards reformism and electoralism. Their main concern is that they may be swept away in a Sinn Féin electoral surge. However, the main issue is that a majority of the electorate accept the basic premise of the capitalist policy - that the Irish economy is dependent and must at all costs attract foreign direct investment to stay afloat.

This stasis is eroding.  The major capitalist parties have shrunk sharply in the polls. Sinn Féin is likely to emerge as the largest party, but before the last election their vote fell sharply, indicating an unstable political system. In addition, the realignment of capitalist forces internationally is also unstable and the budgetary process in Ireland will translate yet again into a continuing assault on the working class which is beginning to run into quite widespread spontaneous resistance from the workers.

Socialists can prepare for an upturn in class struggle by joining with the small forces in action and advancing a socialist and anti-imperialist programme for resistance.

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