‘Consensus for cuts’ points up political divide

The two main opposition parties in the 26 Counties are still supporting the coalition government’s plan to reduce the state’s budget deficit to 3% of GDP by 2014 -- despite learning that the plan involves cutbacks and taxes of 15 billion euro, exactly double what had been previously outlined.

Labour leader Eamon Gilmore told the Dublin parliament on Wednesday that a 50:50 split between extra taxes and spending cuts should be followed to reduce the deficit to the target demanded by European Union officials.

A three-year pay freeze, the introduction of water charges and a reduction of tax relief on pension contributions are also among the controversial Labour Party proposals for dealing with the budget deficit.

On Thursday evening, the 26-County Minister for Finance Brian Lenihan said that “we must not allow any section of the community believe it cannot make any contribution.

“Everyone must make a contribution and those who have most must contribute most, but everybody will have to contribute something.”

The comments, which added weight to reports that the Dublin government plans to slash welfare payments, came at the end of a special meeting of the government at Farmleigh House in the Phoenix Park to consider its handling of the finances of the 26 County state.

Growing public anger at the 26 County state’s near bankruptcy was fuelled by scenes of opulence at the meeting at the restored historical home, and in particular, by the extensive motorcade of luxury vehicles which transported Ministers and their advisers to the meeting.

Speaking in the Dail debate on the Economy today, Sinn Fein Dail leader Caoimhghin O Caolain said the savage cuts called for by Labour, Fine Gael, Fianna Fail and the Greens would prevent recovery and that a better, fairer approach is possible.

“Sinn Fein stands as the real opposition in this debate,” he said.

“Deputy John Gormley’s call for talks between party leaders and all that followed served one very useful purpose - it cleared away the smokescreen of false party rivalry and exposed the alignment that exists in Irish politics.

“It is now very clear that Fianna Fail, the Green Party, Fine Gael and the Labour Party stand together in their economic approach. They form a Consensus for Cuts.

“Sinn Fein stands apart from that Consensus for Cuts - but we do not stand alone.

“The Irish Congress of Trade Unions and its constituent unions, the community and voluntary sector, the ESRI and a range of economists have warned against the strategy of attempting to cut the budget deficit to 3% by 2014.

“Sinn Fein joins with those seeking real recovery and a fair way forward. We are convinced that there is a better way.”

Mr O Caolain said hos party recognised that the deficit caused by the disastrous policies of the government had to be reduced.

“But the plan to reduce it by 2014 by imposing savage cuts to frontline services and social supports will be hugely damaging,” he said.

“It will further deflate the economy and worsen the recession.

“Furthermore, the approach the Government is taking in its four-year plan of frontline and capital spending cuts as well as flat, regressive taxes, is the same approach they have taken up to now -- and it has not worked. Deepening the cuts will only compound the problem.

“We need a different strategy and a longer timeframe. We want a realistic deficit reduction strategy based on fair taxation system that ensures the wealthy pay their share, investing in jobs which will increase State revenue and reduce the social welfare bill and eliminating wasteful public spending.

“Our approach is based on the reality that there is wealth in this State and that 1% of the population control 20% of that wealth. If that inequality had been addressed a decade ago we would not now be in recession.

“It is possible to reduce the deficit to 3% over a longer time-frame, provide real stimulus for jobs in the short-term, raise revenue from wealth, eliminate wasteful public spending and ensure the delivery of public services, while protecting those on low income.”

Urgent Appeal