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Budget 2019

15 October 2018

One of the highest spending budgets proposed by the Irish government since the credit crunch faded from the headlines within a day of publication, dismissed as an election budget.

The budget increased the minimum wage to €9.80 an hour and the highly unpopular Universal Social Charge was reduced by 0.25% for the majority of workers. Welfare and child support payments increased. Tax credits and bands were adjusted. These changes were presented as increasing social justice, even though the wealthy did better than the poor.

That element of the budget was balanced by increases in tax on cigarettes and betting tax. A tax subsidy for the tourist industry was ended.

However the big money was expenditure on education, health and spending, but there were no structural adjustments in these areas, that are all dysfunctional.

It is worth noting that only minor environmental measures we’re included in the budget. Successive governments have not flinched from support for industry, big agriculture and the oil companies.

There were two reasons for the lack of controversy over the budget, one trivial and the other far from trivial.

The trivial reason was that this is indeed an election budget. Few sections of the economy felt extra pain and there were a number of fairly minor feel good elements to present a pretence of aiming towards social justice. The fact that the government borrowed a patchwork of proposals from the opposition parties helped to silence criticism.

Yet the main reason for the lack of controversy is that there is only one financial programme for Irish capital (for example, Fianna Fail, the main opposition party, was consulted on the budget as part of a "confidence and supply" arrangement that keeps the minority Fine Gael government in power).   That programme, set firmly within the rules of the European Central Bank and in the interests of transnational companies, renders the majority of the Irish economy invisible and untouchable.

The  tragedy of the 2019 budget is that the socialist groups now inhabit much the same ground as the capitalists, putting forward left versions of the current financial wisdom.

The burning issues in this budget were housing. education and the health service.

In the case of education a 6.7% increase was announced. This was alongside the recent announcement that payment of increases to offset a two-tier pay system for teachers, agreed in the 2017/18 pay deal with the unions, was now concluded and there were no plans for further restoration of pay and pension cuts.

In the case of health, a €1 billion  increase was announced. Again this was offset by a pay review report which said that there was no need for a general pay increase across the system (half of the review body is made up of former trade union secretaries).

So, in an Ireland which claims full recovery (as long as one does not mention €34 billion in interest payments on the sovereign debt) and with an economy which on paper is leading growth in Europe, investment in public services is insufficient and is being subsided by pay injustice towards public sector workers.

Yet the real contradictions come to the fore in housing. The budget promises €1.25 billion to provide 10,000 new units of social housing in 2019. When the figures are examined we find that most of the money was already tied up in existing government plans and that the 10,000 homes are not new build, but are to be provided by lumping together all possible sources of dwelling acquisition.

The real picture in this landlord's budget, guaranteeing a continuing housing price boom is €121 million in Housing Assistance Payments to landlords  and 100% mortgage interest relief for them.

The "opposition" party Fianna Fail, boasts of winning €300 million for affordable housing,  yet another subsidy for speculators.

In recognition that workers will continue to be victims, €60 million is set aside for emergency accommodation.

Ireland has become the victim of the mass financialisation of housing. A link between local capitalists and vulture capital from across the world saw a firesale of NAMA properties in public ownership initialially acquired to save the banks. The next stage, the mass privatisation of public land, is racing ahead.

There is a real crisis for socialists. Supporting a left version of the budget with more affordable homes and an alliance where the union leaders strike yet another deal with capital will lead nowhere. Yet there seems little appetite for the alternative - a call from above for a mass programme of social housing aimed at the government alongside a call from below for occupation and expropriation of property hoarded for speculation.

Many would argue that the two strategies are not in contradiction. The budget proves them wrong.

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