Republican News · Thursday 18 April 2002

Five Fianna Fáil budgets

BY ROBBIE MacGABHANN

After five years of Fianna Fail and Progressive Democrat budgets, the poorest 10% in 26-County society are nearly Euro10 a week better off, the top 10% are Euro120 a week better off. During the same time, the level of poverty of the poorest 20% in society remained unchanged, proving once again that not only is this a state of rich and poor; it is one where the gap between the wealthy and the disadvantaged has grown, despite years of boom and huge wealth creation.

This might give a focus to the coming election that Bertie Ahern might or might not call this week. When he does, there will no doubt be some well chosen words about the record of his government in office, their achievements, etc. One theme that Ahern has stressed in recent months is his dislike of those in Irish society who in the media and politics talk about divisions between rich and poor. Ahern has rejected this argument repeatedly.

What does he think then of a Combat Poverty report released this week which showed that the proportion of the population enduring deprivation and poverty has remained unchanged after five years of Fianna Fáil in office?

Worse still, the richest 10% of the population received 25% of the budget giveaways in the last five budgets implemented by Finance minister Charlie McCreevy. The bottom 20% on the lowest incomes received just under 5% of what McCreevy had to redistribute.

Five budgets and Euro4.8 billion of tax cuts have left 20% of 26-County households still living on comes 50% below the state average. 9.5% of households are in dire poverty in 2002, unchanged from 1998.

The giveaways to the wealthiest in society does not include other benefits enjoyed by this high income groups such as cuts to capital gains taxes, special tax reliefs and the special savings scheme.

Combat Poverty also found that the 26 Counties is "amongst the most unequal countries in the EU, with one of the highest rates of relative income poverty". Combat Poverty also proposes "a re-evaluation of business taxes, both corporation and PRSI". This, they believe, "would be an obvious starting point".

Fianna Fail's record in office Rich and Poor 1998 to 2002 Top 10% got 25% of budget giveaways Bottom 20% got 5% 1998 20% of households have to live on half average income 9.5% in severe poverty 2002 Unchanged

Insurance rip off

In 1993, there were 17 insurers in the 26 Counties. Today, there are five lucky companies operating in a market ten times more profitable than Britain. This is just one of the findings in a new study released by the Motor Assurance Advisory Board (MIAB). The 750-page report has proven that Irish insurers are exploiting their market position and in particular young drivers, who are being forced to pay unnecessarily high premiums.

There are 67 recommendations in the MIAB report, which is being referred to the Competition and Equality authorities. Now that we know the truth, the question is once again, what is the government going to do about it?

Eircom jobs

Now that the millions from the sale of Eircom have been banked, more of the hidden costs of the privatisation fiasco are coming to the fore. Media leaks from the company are hinting that it might shed 1,500 jobs in a restructuring plan.

Eircom's new owners, the Valentia consortium, plan to outsource some of its key activities such as IT, property, billing and transport. Under EU law, any company entering into an outsourcing contract would have to take on the existing workers, but as yet there have been no firm proposals on what the new owners actually plan to do with the company.

It is interesting that orchestrated leaks about job cuts came before any details about the company's strategy to develop and carry out the much-needed improvements on its telecommunications network. It is clear already that short-term profit needs are driving the company rather than the need to develop a vital economic resource.

Parisian housing solution

Two reports in the last fortnight have shown rises in second-hand house prices. Surveys by Douglas Newman Good and Sherry FitzGerald registered increased Dublin house prices of 6.5% and 5.9%, respectively, for the first three months of 2002.

It seems that Charlie McCreevy's return of mortgage relief for speculative home owners has brought investors back into the housing market and is once again squeezing out people who actually want to buy a home to live in.

One solution to the housing problem could be to follow the lead of Paris city council, which has bought more than a dozen upmarket apartment blocks in the city's wealthiest districts and is now to lease them as council flats. The council wants to increase the amount of low rent accommodation by 20 times its current level.

Every French council has to ensure that at least 20% of the overall housing stock is rent controlled and Paris' socialist Mayor Bertrand Delanoe is delivering on his election promise.

How this double shock of keeping promises while solving the housing problem will go down in Ireland is hard to tell. Given the fate of the last housing minister, anything is possible.