Quelle surprise. Economic difficulties rear their head in the Republic, and Fianna Fáil reacts in the only way it knows how – a reactionary budget that punishes ordinary people, amidst a great deal of talk of belt tightening, difficult conditions, the need for patriotism, and hard choices. We’ve heard all this before, most recently in the 1980s, while the late and unlamented Charlie Haughey was having his suits handmade in Paris, and his buddies were making fortunes from corruption – a house of cards brought down, lest we forget, by Tomás Mac Giolla’s exposure in the Dáil of the nature of the Goodman company. The south, through a combination of EU membership, a young, English-speaking, relatively well-educated and relatively cheap workforce, low corporation tax, and being in the right place at the right time, has as we all know been transformed in the last two decades. Oh yeah, and let’s not forget an unsustainable Thatcherite housing bubble. There has for a large number of the last fifteen years been a large budget surplus, and some good has come out of it – investment in transport and infrastructure (although of course with the usual incompetence and stupidity as over the Dublin Port tunnel, the trams, and the failure to deal with the gridlock in Dublin), investment in education, better services in some areas, more employment, and an undoubted rise in living standards. The liberalisation and secularisation of society has also been accelerated by these trends. Those who raised doubts about the extent to which the money being made was being transferred out of the country by the multinationals, or concern about the short life span of factories owned by multinationals, or the failure to develop a significant native-owned industrial sector, or the vastly uneven distribution of the new wealth, or the failure to tax it properly, were mocked as remnants of the past, economic illiterates, begrudgers, and fools who refused to recognise the profound transformation wrought by recent economic development.
Hmmmm. The arrogant assumption that the Celtic Tiger was a juggernaut impossible to roll back, and that the economic growth would inevibatly continue looks a lot more silly than the questions raised during the height of the boom. What has happened is that a problem centred in America has radiated out from there and is on the verge of wrecking the southern economy. Obviously, every country in the world will be hit, and hit hard, by serious difficulties in America, but the south is particularly vulnerable as probably the most open economy in the developed world, with a huge proportion of its investment coming from the US. That is all understood. The question is, what resources does Ireland have to fall back on when its main sugar daddy cuts the purse strings? The answer is simple. The money accumulated during the boom years has been frittered away, and a government that makes a great deal of its skills in economic planning through its much-trumpeted National Development Plans has done precisely sweet bugger all in creating and sustaining native industry that was not almost completely dependent on the goodwill of others. This was of course very much a consequence of ideology. Not I admit a word much associated with Fianna Fáil, for whom the famous quip “You don’t like my principles? Wait, I have others” could have been invented. However, Fianna Fáil for the last five decades has been committed to a policy of free market economics and reliance on foreign capital for economic development, as have the other main parties in the state.
And we can see the consequences of this in the Budget. Here we have the Minister for Finance:
“The Government is determined to retain and enhance Ireland’s reputation as a pro-enterprise economy and as an attractive location for foreign direct investment. The most important action we can take in this regard is to stabilise our public finances.” The budget speech also spoke at length about the importance of foreign direct investment, added to some references to indigenous industry. There was a great deal of discussion of cutting the debt, ensuring fiscal stability, and all the other buzzwords so beloved of the right internationally – except when it comes to bailing out multinationals and funding armies. So what does all this actually mean? It means that the budget is dominated by the interests of foreign capital, and the people expected to make the sacrifices are the ordinary taxpayer, the young, and the old. As usual.
Corporation tax will stay where it is. Irish government policy will continue to serve the needs of the multinationals. And the Irish bourgeoisie. A 1% levy is being added to incomes – to the gross of all incomes – up to around 100,000 Euro. 2% on anything over that. So much for all the talk of fairness. 1% of 20,000 Euro means a lot more to the person earning that than two percent does to the barrister or whoever earning a million Euro. Not only that, but child benefit is being restricted, numerous education grants – including to Travellers – are being cut, and automatic medical cards are being taken away from the over-70s. This last measure in particular is quite simply barbaric. And turning the clock back not so much to the 1980s, but to the Dark Ages. In a demonstration of how little has changed in government priorities since the creation of the Free State, farmers are getting a great deal of continued support and relief.
Let’s make no mistake. This is not far from the most reactionary budget thinkable in the current circumstances – a budget for the multinationals and the rich at home. A budget right out of a different era, despite the populist pay cut for Ministers.
At least in the 1980s, there was a vibrant movement opposed to the right-wing initiatives of government. The PAYE workers’ campaigns, a less pliable union movement, and a serious and committed left voice in the Dáil in The Workers’ Party, which was active in promoting an alternative set of economic priorities through its Research Section. And, as we have seen, exposing the corruption of the establishment. We lack that voice now. And we are going to suffer for it.