“The worst is over,” said Minister of Finance Brian Lenihan on 9 December on the presentation of the 2010 Budget. It is actually truly astounding that the Irish Government believes that the worst of the recession is over. The number of people signing on the Live Register of the Unemployed is still increasing. The number of people living in poverty is rising. The number of people unable to pay their bills is rising. The Society of Saint Vincent de Paul has reported a fourfold increase in people applying for food assistance. The worst is certainly not over.
The rhetoric of “everyone sharing the pain” has popped up in every conversation about the financial state of the nation in the lead up to Budget 2010. Another very soundbite was “protecting the vulnerable in society,” and it was emphasized to the hilt. Everyone was in favour of protecting the vulnerable. There was a consenus. In forty minutes, Minister for Finance Brian Lenihan demonstrated that the Irish government does not care about people living in poverty, or the need for hospital beds or the sharing of pain, and most especially not protecting the vulnerable. Lenihan and the Irish Government are protecting the least vulnerable.
The poverty line is €11 965 per annum for a single person in Ireland. Not only was the single rate of jobseeker’s allowance under the poverty line at €11 440, but Lenihan has now reduced the allowance to €10 976 for the over 25s, €8 400 for 22 to 24 years and €5 600 for the 18s to 21 years. All those figures are for a single person with no dependents, but they demonstrate the Government’s lack of provision for those without other means of support.
Not content with reducing the disability allowance, the widows’ and widowers’ allowance, the carers’ allowance, the allowance for the blind, and the single parent allowance, the Government has also hit the child benefit allowance. Child benefit is the state’s contribution to the cost of raising children and until today was universally applied. Now it has been reduced by €16 per month, to €150 and €187. Lenihan stated that he regretted not being able to tax this benefit as well. His reasons for slashing child benefit is that it cost €2.5bn or 12% of the welfare budget this year. That the Government has spent €4 bn on the putrid, festering sore that is Anglo Irish Bank was not mentioned.
The Minister said “we must provide a functioning banking system and to return this economy to the path of sustainable growth.” One of his methods is to charge 50 cent on prescriptions under the medical card scheme. Heretofore, these were free because the medical card scheme is there to provide medical services to those who cannot afford to pay. Now it seems that the money will have to be found by those living below the poverty line.
Social welfare will be reduced by 4.1 percent overall. This is hardly in line with “protecting the vulnerable,” but there is a glimmer of light, perhaps with, the reduction in cost of alcohol.
The Irish Government, in their infinite wisdom have lowered the cost of alcohol to prevent cross border shopping – 12 cent on pint of beer and cider; 14 cent per half glass of spirits; 60 cent on a bottle of wine. Given that the cost of alcohol in Northern Ireland is a couple of euro cheaper, I do not think that it will make the smallest difference to cross border shopping.
As Barnardos, Ireland’s leading children’s charity tweeted,
Cheaper alcohol in #budget10 = social & health consequences. More use of A[ccident] & E[mergency], more road accidents, more domestic violence. Why Minister?
It is especially baffling given that there was quite a public controversy last month when the Government proposed a reduction in the legal blood alcohol level, until they were forced by their backbenchers to stand down. The OECD reported today that the Irish are among the top consumers of alcohol. The Government seem divided on the alcohol issue.
In addition to the reduction in alcohol excise duty, a car scrappage scheme was introduced until end of 2010 – €1,500 off a new car. It is a pity that we have no car industry to promote jobs and the economy through such a scheme. Indeed the Labour spokesperson on finance Deputy Joan Burton noted that this was quite a Top Gear budget – cheaper beer and cars being the only stimulus package.
There are new increases such as the carbon tax. It is equivalent to €15 per tonne to be introduced on petrol, diesel, home heating oil and gas (petrol up 4.2c per litre; briquettes up 39c per bale; coal up €1.79 per 40kg). The Irish people also welcome back water charges. These will be introduced based on consumption above a free allocation, to finance provision of services by local authorities. Again, what is not mentioned is that 45% of drinking water is lost through leaks in the pipes and that the local authorities are in charge of said pipes.
In the spirit of balance, I must mention the “Bono” tax. In Ireland, there was much ado about Paul “Bono” Hewson’s preaching about poverty and his prancing around the world stage acting the jackass, while not paying a penny in tax in Ireland. He is resident in the Netherlands for tax purposes. Lenihan has imposed a €200 000 fine on rich tax evaders who have a house in Ireland. Take that!
The Arts Funding is also cut, meanwhile. Grants to sport in disadvantaged areas are down 70%.
It was forty minutes of pain, but near the end of his speech, Lenihan gave the people of Ireland a laugh. Granted it was a laugh of disbelief and horror but a laugh is a laugh:
A Cheann Comhairle, I want to recall the death earlier this year of Senator Ted Kennedy. Senator Kennedy was unquestionably one of the best friends Ireland ever had on Capitol Hill. Today, in a modest way I would like to honour the memory of a great man from a great family. The Government will provide funding for a project at the Kennedy Homestead in Dunganstown, County Wexford from which his forefathers emigrated in the early nineteenth century. The development of this important visitor attraction will be a welcome boost to tourism in the South East.
Lenihan proposes to invest €22m in a cottage in memory of Ted Kennedy. While Kennedy assisted in the Irish peace process, spending €22m on a cottage is wildly inappropriate. It smells like a kickback for voting support.
There is much more in the 2010 Budget. I have not even touched on the taxes of those on low and middle incomes who are heading towards poverty. Defaulting on mortgage payments because of job losses or reduction in take home pay is becoming normalised. While the banks are not repossessing many homes yet, it is only a matter of time. The banks are biding theirs until the National Asset Management Agency removes all their toxic loans.
Minister Lenihan, this was the unkindest cut of all.