Cuts not needed to balance budget

Sinn Fein has said it is the only party in the Dublin parliament opposed to the 3 billion euro in planned spending cuts.

The party’s finance spokesman Arthur Morgan said yesterday that the party did not subscribe to any aspect of the plan, to be revealed in December’s budget.

“It’s not just the Government. Fine Gael and Labour also support the slash-and-burn approach of cutting 3 billion euro,” Mr Morgan said.

The Dublin government has said the cuts are necessary to fund the escalating ‘bail-out’ of Ireland’s banks and property developers, who lost vast sums in the collapse of the 26-County property bubble.

Government officials have been examining a new “universal social contribution” which is expected to replace PRSI (Pay Related Social Insurance), the health levy and income levy in the forthcoming budget.

Internal government documents show measures being studied include removing the income threshold under which low-paid workers don’t have to make social insurance contributions; and requiring contributions on rental income, investments, share options and other “unearned income”.

Meanwhile, the money spent by the government in sustaining the fraudulent Anglo-Irish Bank hit an extraordinary 24 billion euro this week, while losses have also escalated at Ireland’s remaining private banks.

The government is now borrowing up to 1.5bn every month to pay for the bailout, which is threatening to overwhelm the 26-County economy. The cost of Irish borrowing has also doubled as international debt markets increasingly fear the state will struggle to repay its debt, despite new European Central Bank support measures.

However, Sinn Fein has challenged the need for cutbacks to essential public services. The party has instead focused on new taxes on the wealthy, as well and reductions in the salaries of high earners in the public sector.

A new youth employment strategy was launched by the party’s finance spokesperson Arthur Morgan and by South Dublin councillor Sean Crowe on Wednesday. The policy paper proposes an investment of almost 1 billion euro by the State to get at least 50,000 young people off the dole.

The core proposal is for an investment of 500 million euro in a youth jobs fund that Sinn Fein says would have the potential to create 20,000 jobs.

The party also wants individualised plans to be made out for every person under 25 on the Live Register.

Other measures proposed include foreign-language training for 2,000 young people; 10,000 new places on Community Enterprise schemes, at a cost of 168 million euro; and 1,000 places on conversion courses to allow third-level graduates to convert their skills, an initiative that would require a O15 million investment.

It also details eight measures that it has argued would treble the number of under-25s who are self-employed. The measures include a national entrepreneurship programme; better access to credit; and more organised support for start-up companies that have strong potential.

“There are almost 100,000 young people on the Live Register. Many of these people have high educational attainment. We need to get them back to work,” said Mr Morgan.

Mr Crowe said were almost 3,000 people under 25 unemployed in his constituency of Dublin South West.

“The Government is doing nothing for them. It hopes they will emigrate and many have already gone. This is not good enough,” said the Tallaght-based councillor.

Asked how the party would find the funding for an outlay of 1 billion euo on the initiative, Mr Morgan said they were calling for certain new taxes, as well as taking some funds from the pension reserve.

The party has called for a new tax rate of 48 per cent for those earning over a hundred thousand euro; the standardisation of all discretionary tax reliefs; as well as a 1 per cent wealth tax on any asset worth more than a million euro that is not the family home or farmland.

“The wealth tax will penalise those who can afford it. [Economic] policy needs to be about jobs, jobs and more jobs. The Government focus to date has been on the banking sector,” Mr Morgan said.

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