Tax promises shelved
Dirty dozen architect is back
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In 1992 McCreevy and the Fianna Fáil/Progressive Democrat
government chose to target those who were suffering most to make
the budget balance.
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What a difference four and a half years can make. Or can they?
Four and a half years ago Charlie McCreevy architect of the Dirty
Dozen social welfare cuts left office as probably one of the most
contentious ministers for Social Welfare in the history of the
26-County state.
McCreevy's cuts in social welfare spending came at at time of
record unemployment figures and social hardship for hundreds of
thousands of Irish people. It was also a time of huge growth in
the wealth of the state and the profitability of companies in
Ireland. Yet in 1992 McCreevy and the Fianna Fáil/Progressive
Democrat government chose to target those who were suffering most
to make the budget balance.
In the subsequent Labour/Fianna Fáil government McCreevy was in
the much less contentious ministry of Tourism and Trade. Here was
a transformed man, gone was the tough-guy advovcate of fiscal
rectitude.
Since 1994 McCreevy has been Fianna Fáil spokesperson and now
Minister for Finance. The still unanswered question is which
McCreevy do we have back. This week the minister began to unveil
his 1997 image. He let slip on Tuesday after a meeting with
employers and trade union representatives that the much hyped
election promise of tax cuts might not be delivered because of
fears about fuelling inflation.
The argument being made by the government is a simple one. If the
promised tax cuts were made, they would increase consumer
spending, which could outpace economic growth leading to a prices
rises, not unlike what is happening in the housing market. These
price increases could start a spiral where employees would look
for wage increases and employers would hike prices again to pay
for the increases and the whole economy would be caught in a
damaging inflationary spiral.
The Dublin Government will keep commitments made in the
Partnership 2000 agreement with the employers and unions, but the
election promises of greater tax cuts might not be kept.
We contacted the minster's press office to find out whether this
meant that all tax promises would not be kept or just the ones
relating to income tax. It could be that workers would not get
their tax cuts but that their bosses would and corporation tax
would be cut to the promised level of 10% of profits. As it is,
corporation tax is substantially lower than income tax.
The Finance press office didn't want to comment on what the
minister said. However they did admit that we were ``probably
right'' to say that income tax cuts would be seen as contributing
more to inflationary pressures than changes in corporation tax.
They also maintained that they ``can honestly say that he (the
minister) doesn't know what is going to be in the budget yet''.
However one thing is clear is that when it comes to a contest
between the needs of firms in Ireland versus their workers it is
highly unlikley that the workers will be in with a shout.
Companies bigger than countries
General Motors who closed down the Packard plant in Tallaght are
bigger than Denmark. Ford is larger than South Africa, Toyota is
bigger than Norway
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Just how big and how powerful are corporations that make up the
economies we all live and work in? Well wonder no more. A new
publication from the Washington Institute for Policy Studies
titled The Rise of Global Corporate Power details the comparative
wealth of the planet's top 200 companies. For example of the
largest 100 economic units in the world 51 are now corporations.
The retail giant Walmart is larger than 161 states. General
Motors who closed down the Packard plant in Tallaght are bigger
than Denmark. Ford is larger than South Africa, Toyota is bigger
than Norway. The annual sales of the top 200 corporations are
greater than all the combined economies of the world minus the
biggest nine.
Finally the most insightful detail is the fact that the top 200
companies have combined annual revenues of $7.1 trillion compared
to the $3.9 trillion that is the combined wealth of 80% of the
world's population.
Paying your way
No one, not even those who support privatisation of the public
service, can argue that its effects on these privatised companies
are not substantial. We in An Phoblacht have become conditioned
to the announcements of seven figure salary deals for executives
and huge profits for the newly privatised companies whose
parallel cost cuts lead to a reduction in the quality of services
they offer to the general public.
However recent events at the Great Eastern train company have
shocked even us. The company who run services between East Anglia
and London are trying to recruit their passengers to work as
train guards.
The plan is simple. In return for free travel and £5.25 an hour,
all you have to do is arrive at the station a little earlier than
your train. Then you change into your uniform and catch the train
to work. Your jobs on the journey include checking doors are
closed making announcements and signalling to the driver that the
train can move off. While not being responsible for collecting
tickets the part time guards will be expected to deal with any
emergencies.
Rail unions in Britain have protested to the Health and Safety
Executive but the HSE have no problems with plan designed by
Great Eastern commercial director Mike Turner.
Turner saw the plan in action in that bastion of social progress
-Hong Kong and decided to launch the plan in Britain. The only
worry is that the management of CIE currently in the throes of
their own path to capitalist competiveness will try and introduce
such a scenario here. You have been warned.
Farmer jobs
With the formal ratification of the merger between Avonmore and
Waterford co-ops there is still a question mark over the security
of jobs of the workers at both plants. Trade unions at the
companies have been promised that there will be no compulsory
redundancies but the media is awash with rumours that jobs are
not guaranteed.
Whatever about the redundancy issue another serious question is
who will actually run the newly merged corporation. The merger
was approved by 18,000 shareholding farmers, all of whom
benefitted financially in the short-run at least from the vote.
The Kilmeaden Committte who lobbied against the merger maintain
that it would mean ``loss of farmer control''.
Now that the merger has been ratified, it is being described as a
``catalyst'' for the rest of the dairy industry, which means
preparing for another round of mergers and take overs. In almost
every other industry that has gone through this process it has
resulted in bigger companies but much less jobs.
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