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Budget 2021

Dublin government turns economic strategy on its head. Opposition is silent.

18 October 2020

The Irish budget for 2021, published recently, was noticeable for the lack of response. These events usually produce heated commentary and lobbying but on this occasion there was silence. The silence is all the more remarkable in that Irish capitalism essentially stood on its head. The austerity budget of the last government turning through 180 degrees from an austerity budget to one aimed at large scale expenditure.

This is all the more astonishing given that the last austerity government is essentially the current expansionary government and the last finance minister is also the current finance minister.

Incredulity grows when we realise that the last government was brought down by its failures on housing and health and, resurrected with the help of the Green Party,  there is more money but no change in strategy.

Part of the explanation for the lack of response is the role of the trade union leadership. They were brought into government consultation at the outbreak of Covid-19 in Ireland. In return they have become largely invisible, with doctors the main source of complaint about health, school principals the main source of complaint about education and housing charities dealing with homelessness.

In any case the unions see a counter-cyclical expansionary budget as a major win. The response from Sinn Fein and the reformist left was also muted,  as their programmes are also based on greater government spending and borrowing.

What links the past austerity and current Keynesian budgets is the survival of Irish capital. In the former case the workers paid the bill for bailing out the banks and bondholders. In this case the government will borrow billions to avoid economic collapse. The workers will face the final bill, but the government hope that low interest rates, European support and a rapid economic recovery will dull the pain of payment. The capitalist class realise that another plunge into austerity is out of the question.

Yet, other than a general boost via government spending, there is little that is new in the overall direction of the economy.

There is €500 million for social housing, with 9500 new units,but this will be provided in the current framework of giving away public land to attract vulture funds. There will be an expansion of HAP tenancies, heavily criticised as as giveaway scheme for landlords. Only €22 million is reserved for homelessness programmes.

The Health service is to be expanded with an extra €4 billion but in a framework where more investment is predicated on more privatisation.  There will be 1146 acute beds, but much of the focus is on community care which will be a feeding group for privatisation.  The death rate in private homes is not mentioned.

Public pay also has no mention.  The two tier pay structure of the credit crunch is now set in stone. As older workers retire the lower rates paid to new entrants will become the new basic rate.

There is a nod to Green issues with proposals for more energy efficient homes, but more main Green policy is focused on a carbon tax that will impact workers. No structural changes to the economy are seriously contemplated. Instead there is the notion that we can gradually transform to a green economy with the support of Europe.

There is no doubt but that everyone understands the main dangers ahead. Covid-19 is roaring ahead and the state has fallen back on social isolation, meant only to buy time for test and trace systems to develop.

All the bluster about Brexit has been dispelled.  We are on the edge of a hard Brexit, fed by Leo Varadkar's capitulation to Boris Johnson and the native southern economy will suffer greatly. The northern economy will decline from a low base. A physical border will return with many political repercussions.

The most basic response to both these threats would be a United Ireland.

In the case of Covid the existence of two regulatory systems is bound to aid transmission of the virus. In addition a well known local epidemiologist has stressed the immense advantage of controlling movement at a natural single costal region.

The case for a United Ireland in the case of Brexit is also self evident. A mainly political division of the island will be transformed into an economic barrier that will damage workers on each side.

Irish unity is a necessary but not sufficient basis for the progress of the working class. If a major power such as Britain is plunged into crisis a small nation like Ireland cannot survive alone.  That's why we advocate for a United Socialist States of Europe as a mechanism for surviving the political, economic and environmental crises of late capitalism.

Not surprisingly,  these proposals are not on the agenda for the capitalist class and their supporters. The Dublin government is becoming more and more openly unionist,  indicating that they support a continued partition of the country. The current budget reserves €500 million for a "Shared Ireland" project that is meant to take an Irish democracy off the table for good.

An alternative budget would involve mass public housing, a public NHS available for all and a complete restructuring of the economy to produce a sustainable society. It would involve the overthrow of capitalist rule,  the end of Britain's partition and a repudiation of the massive debt imposed by Europe.

Beginning such a struggle requires us to move towards the building of a revolutionary party of the working class.

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