Santa McCreevy
Pounds for the rich - pennies for the people
``The Minister For Finance could choose to be Santa Clause or
Judge Dredd'' - Charlie McCreevy. For an hour yesterday the 26
Counties tuned in to the McCreevy budget show. It started well
but after a few minutes of swaggering and point scoring it became
clear that McCreevy cannot escape from his accounting background.
He promised much, gave little, creating an illusion of balance
but in the end merely perpetuated existing inequalities for a
year.
The most disappointing part of this budget was that McCreevy
missed out on an opportunity to move towards removing the
inequities of our tax and social welfare system.
He spurned the recommendations of the Combat Poverty Agency.
Their research showed that the best possible way to help the low
paid financially was to increase personal tax allowances by £1000
for a single person.
McCreevy upped the allowance by only £250, decreasing taxes on
the 26% and 48% band by 2%. This will help many workers but makes
sure the top earners get a disproportionate benefit of the tax
cuts.
McCreevy matched the cuts in top rate of income tax by slashing
capital gains tax in half to 20%. This was the one element of the
26 County tax regime that remotely approaches the need for a
wealth tax and McCreevy has reduced it. Corporation tax which is
already lower than income tax has been cut by 4% to 32%
It makes the £3 increase in unemployment benefit paltry. There
were some positive elements of McCreevy's budget particularly the
improvement in allowances for widows, carers and disabled people
and the £3,000 tax allowance for long-term unemployed people
returning to work.
This though was small beer. McCreevy claims he has delivered
substantial tax reform. He has not. Instead the very lucky bag of
of ``spending to win votes'' which he promised would not happen was
duly delivered. Sadly McCreevy did play Santa but only to the
rich and the wealthy who yet again will walk away laughing.
atomy of a corporate sell out
750 jobs cut at Avonmore-Waterford
The merged entity will create a truly global player on a scale
which will benefit the national interest as well as the
shareholders
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Twenty four jobs will be cut in Kilmeaden, 27 in Dundalk, 35 in
Clonmel, 130 in Dungarvan and 214 jobs will be lost in
Rathfarnham, home to Dublin city's last remaining dairy. This was
the startling news that shocked workers last week at the newly
merged Avonmore Waterford Group (AWG), the fourth largest dairy
company in Europe and fourth largest cheese producer in the
world. The job losses in Ireland were matched by cuts of 550 jobs
at AWG's British plants.
These cuts were not the actions of management trying to stave off
closure. This was just an Irish multinational ``optimising
competitiveness'' by dumping its Irish workers one day and
planning more foreign acquisitions the next.
How did this happen? How was AWG allowed to spurn the very
workers whose efforts have turned it into such a huge
international company in the first place? The background to this
latest episode of corporate profiteering begins last March.
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These redundancies sound the death knell for the co-operative
principle in Irish business.
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March
Avonmore's 1996 results were announced on 3 March. Profits at
£36.5 million were up 14% on 1995. The dairy, meat and
agri-trading company was planning acquisitions in the US and
Britain of more than £150 million. Two weeks later Waterford
Foods announced that profits for 1996 would be £5 million less
than 1995 but still a healthy £19.8 million. Average payments to
Waterford's five executive directors was £198,000 each.
April
Avonmore announced plans to make a giant food company through a
£600 million merger with Waterford. They predicted the merger
could save the new company up to £200 million a year through the
elimination of milk collection and overlapping businesses. For
Waterford to accept the merger they needed the approval of 75% of
co-op shareholders who owned two thirds of the company.
The day after the merger was first proposed Avonmore upped their
offer to the Waterford farmer shareholders offering them free
shares and milk price improvements totalling £40 million. The
Irish Farmers Association (IFA) welcomed the merger.
Avonmore spokesperson claimed that the merger would be ``in the
best interests of the shareholders and the milk suppliers'' and
that there was ``a consensus at government and industry level.
Unions at the two companies registered their reservations to the
proposed deal.
May
Waterford reject the Avonmore offer. Avonmore proceed with their
planned £54.2 million purchase of British cooked meats company,
Beni. On 26 May Avonmore make an improved offer for Waterford,
with shareholders getting even more money and higher milk prices.
The Waterford management approve the offer. The new merger would
be worth around £6,500 to each farmer. In total they stood to get
£115 million in cash and shares.
Some farmers are opposing the deal. John Cashman a Waterford
co-op director opposing the merger commented that ``they're taking
our property - the co-op property - and they're converting it
back into plc property in order to bribe us to hand over
control''. He also added that he believed they could get a deal
``totally undreamt of'' by farmer shareholders.
June
Trade unions representing workers at Avonmore and Waterford are
promised there will be no compulsory redundancies if the merger
is approved by shareholders.
July
The Leinster Milk Producers (LMP) group endorsed the merger. On
11 July shareholders at Waterford voted 83% in favour of the
merger, while Avonmore shareholders voted 98% in favour. By the
end of the month a Sunday newspaper revealed that plans have been
drawn up to shed up to 700 jobs at the new food giant.
August
Enterprise, Trade and Employment minister PD leader Mary Harney
approves the merger. ``The merged entity will create a truly
global player on a scale which will benefit the national interest
as well as the shareholders of the new company'' she said.
October
Unions seek meeting with Avonmore Waterford Group (AWG)
management to clarify rationalisation plans for the 13,000 strong
workforce.
November
AWG announce 1300 redundancies, 750 in Ireland. Chairperson John
Duggan said that management had to ensure that the group was
positioned to ensure competitive advantage in the interests of
its shareholders.
Net Result
The net result of all the Avonmore Waterford merger is this.
Nothing changes for the top level management who proposed the
deal, except perhaps the possibility of higher executive
salaries.
The farmers who approved the deal have lost control of the new
company to the financial institutions who will plan the company's
future strategies. They are though enjoying in the short-term a
multi-million bonanza with the payout they have got from
Avonmore.
In the long-term their future is no more secure than that of the
workers who in 1998 will be made redundant. Is this sequence of
events really in the national interest?
Why is there silence from the Dublin Government on the negative
consequences of the merger? Why did the farmers who benefited
from the merger not insist that their fellow workers would not be
discarded by management?
The answer is that throughout this merger there was no real
national interest only the relentless pursuit of self interest
leaving those who were weakest - the AWG workers paying the costs
for the benefits of others. The AWG lay offs shows clearly that
Irish corporate capitalists are no different from their
multinational brethern. These redundancies sound the death knell
for the co-operative principle in Irish business. From now on the
creed of the carpetbagger is the only voice in Irish corporate
culture.