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Budget 2020 - "Heads I win, tails you lose"

Budget revisits an austerity strategy that was never abandoned

13 October 2019

Following the post-2008 credit crunch Irish capitalism instituted at decade of austerity budgets, taking responsibility for 46% of a European banking debt that was to be paid by Irish workers. Pensions and services have never recovered. Now in budget 2020 the government has introduced a new austerity regime, this time justified by a looming Brexit. The workers are to pay again but this time there is no protest. The union leaderships, who usually stage a pantomime around some prearranged deal, stayed in their beds, having been told in advance that there was no deal on offer. The reformist left,  tied at the hip to the union leaderships, contented themselves with publishing a virtual reformist budget.

The workers will be surprised at the silence of a union leadership that recently declared that the workers would not bear the cost of Brexit and at a left that held a September conference to declare opposition to the Brexit budget that has now arrived. However at the moment a generalised resistance is unlikely. The failure of attempts to break out of the PSSA (Public Service Stability Agreement) structure and  restore equal pay in the public sector,  followed by the slow strangulation of the movement to win housing rights, tells many workers that the only viable strategy is to adapt to austerity and to the limitations imposed by union leaders.

There was a severe embarrassment in the government presentation. They had signaled  a regressive budget on the basis of low tax income but Ireland's status as a tax haven led to a further influx of foreign capital and a large surplus in the tax coffers. The budget stayed the same but the rationale for austerity was now Brexit.

Just how restrictive this budget is can only be appreciated when we take into account the Maastricht deal which in every budget restricts public spending to 3% of total income, the sovereign debt which continues to be paid by the Irish state, the rainy day fund which sees a further withdrawal from public spending and finally the Brexit restrictions themselves; part of which estimate rising social security payments as unemployment increases but many are direct guarantees to business preserving them from risk with subsidies drawn from workers taxes.

As with every regressive budget there are sprinkles to distract our attention.  Children below eight will get free treatment at the GP and those under six dental care. Prescription charges are to be halved.

In social welfare the changes become laughable. Child payments for those under twelve are increased by €2 per week. Fuel allowance increases by the same amount.

Irish capital has looked after itself and the results are dire. The housing crisis is to continue and the overall strategy of the government remains dependence on a market mechanism to provide homes. A modest increase is offered to the housing budget.  it is aspirational with no firm targets. Again it talks about social and affordable housing, when social is simply piggybacking on the private sector and affordable is a €400,000 mortgage.
In the background there are  land grabs by the vulture funds and the giveaway of public land to property developers.

€1 billion is awarded to health,  but this will just meet current overruns and do little to meet chronic shortages and lack of staff. The draining of resources by the private sector will continue to be ignored as will the eyewatering giveaway to that sector in the construction of a new national children's hospital. In education there is a shortage of capital expenditure, of resources for special needs and the continuation of two-tier pay within the profession and wage cuts brought in for new entrants  becoming permanent divisions among the workforce. This is a problem across the public sector as the government retains the cutbacks achieved in the credit crunch.

One striking element of the budget was the continuation of indifference to climate change. All the major elements of pollution and carbon emission were ignored. The cover was a carbon tax that monitarises the issue and thrusts the cost onto the workers. Big business remains exempt and government strategy remains aspirational.

What's the alternative to this budget? First we must say what we see. What we see is a dependent economy - a tax haven dominated by imperialism with a parasitic ruling class that administers the economy on behalf of itself and the banks while ignoring the interests of the workers.

A starting point is to reject the debt and the constraints imposed by Europe. We have had over a decade of being the poster boys of European austerity. Europe has done very well out of it. Irish capitalism has has  done very well out of it. Our reward is another decade of austerity.

Having implemented a "heads I win,tails you lose" budget Leo Veradkar  has now launched secret diplomacy with Boris Johnson.  The interests of Britain and of Irish capitalism will come first. Who will speak for Irish workers?

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