Sunday, October 31, 2010
Our plan will reduce the deficit by €4.671 billion and provide for a financial stimulus of €595 million in 2011 and a three and a half year economic stimulus package of €7.595 billion. The plan exposes the Government myth that cutting social welfare, introducing water charges, bringing the low paid into the tax net, doubling college registration fees and cutting child benefit are all necessary. They are not. They are the choices of a bad government and a poor opposition.
The Irish economy is like a sinking ship. We all need to work together to get the ship to port. What the Government and the other parties want to do is to throw the weak, vulnerable, low paid and those out of work overboard. Bankers, bondholders, speculators and the wealthy will be safely lowered into the lifeboats. They want to take more from those who don’t have it while protecting those who can afford to pay more.
We are proposing a third rate of tax on incomes in excess of three times the average industrial wage (€100,000), standardising all discretionary tax reliefs, introduce an income-linked wealth tax, increase capital gains tax from 25% to 40%, increase Capital Acquisitions Tax to 35%, increase DIRT tax, reduce the earnings cap for pension contributions for high earners and increase tax on multiple housing units.
There are far too many tax exemptions available to the wealthy in this state. These are regressive in the best of times. They are immoral at a time of deep recession. We are proposing the abolition of mortgage interest relief for landlords, abolishing the PRSI ceiling, abolishing PRSI exemption for share options and abolishing a raft of property tax reliefs. The state cannot continue to subsidise the wealthy as the less well off see their income cut to the bone.
Public Spending Savings
This state is facing bankruptcy and we need radical proposals. Taxing the wealthy is a radical proposal and is right. Cutting child benefit is not radical and it is wrong. Senior civil servants and Government Ministers, TD’s and Senators are overpaid. The Government is considering taking €5 a week from someone on social welfare who survives on €196 a week, while paying the Director of the HSE over €300,000 a year. This is not fair or sustainable.
We are proposing that Ministerial salaries be capped at €100,000, TD’s at €75,000 and Senators at €60,000. We seek to cap the maximum salary of public servants and employees in semi-state bodies at four times the entry level rate (€100,000 per annum). We also propose the introduction of a proper vouched expenses system for all public representatives and senior civil servants and reducing the states professional fees by 25%.
Attempts to address the deficit without providing an economic stimulus is economically illiterate. Government policy to date has been to cut and it has failed. Every time they cut they deflate the economy and the tax take drops. Doing more of the same is not going to work. They are joined in this thinking by Fine Gael and Labour. These are the parties who said a vote for Lisbon was a vote for jobs, investment and prosperity. They all believe that to grow a little, you must cut a lot. We believe that to grow at all, you must invest. Without a stimulus the economy will sink faster and deeper.
We are proposing both a financial and economic stimulus plan. We will use €595 million saved in 2011 to provide a financial stimulus to the less well off. This will include making tax credits refundable to the low paid, return the additional social welfare payment to those out of work, remove all those under the tax bracket from the Government levy and also remove the 50 cent levy on medical card prescriptions.
We would also transfer €7 billion from the National Pension Reserve Fund for a state-wide investment programme. Last year the NPRF invested in a champagne house in France. Why not invest in new schools the new geriatric unit at St Patrick’s Hospital and Waterford Regional Airport instead? Let’s invest in the Irish economy.
An economic stimulus is good as it will create jobs, provide good value for money and position the economy to recover. At the moment the Government is putting our money in the black hole that is Anglo. They are investing in banks. We will invest in the state and people. Let nobody say there is no alternative to the consensus for cuts. We in Sinn Féin are providing it
Tuesday, October 19, 2010
Thursday, October 7, 2010
In recent times the language has changed. He seems to be opening the door to cutting a deal with the bank’s creditors, particularly with subordinated bondholders. These are investors at the back of the queue whose debt is paid only after senior bondholders have been paid – who may be expected to share in the “burden” of bailing out the bank. The total state investment in Anglo will reach at least €34 billion and may increase further.
I do not intend to deal with the outrageous nature of this bailout and state ‘investment’ in Anglo. I have done that in other posts. I am however posing questions about the nature of the bank guarantee and in particular the protecting of bondholders. We are constantly told by Government that senior debt obligations rank equally with deposits and other creditors under Irish law. So what – laws can be changed. The total amount owed to bondholders is about €4 billion. Subordinated debt amounts to about €2.4 billion.
I pose this question – would the sky fall in if we burned the bondholders? The Armageddon scenario painted by the Government that it would undermine the entire banking system is without foundation and completely without credibility. The banking system has been undermined anyway despite state guarantees and a recapitalizing of the banks.
I would like to see Anglo wound up as quickly as possible. The terms of the state guarantee should be revisited with the protection of all bondholders removed. This would allow the Government to negotiate with the bondholders on their terms and in the interests of the Irish people. We must remember that Anglo Irish Bondholders invested in a bank that was behaving in a reckless and greedy fashion. Their money was being lent to people to speculate recklessly. The speculators gambled, the bank gambled and in a way so did the bondholders. So why should they be protected from any pain?