National debasement disguised as a rescue plan

By Vincent Browne (for the Sunday Business Post)

The Programme of Financial Support for Ireland will be subject to three-month reviews “of conditionality”, observance of “quantitative performance criteria” and “respect for EU Council decisions and recommendations”.

There must be compliance with a catalogue of budget measures for four years with the concession that, “in exceptional circumstances, measures yielding comparable savings could be considered, in close consultation with the European Commission, IMF and ECB staffs”. The government is required “rigorously” to implement the budget measures for 2011, 2012 and 2013, outlined in the document.

The following is a sample:

* The lowering of personal income tax bands and credits or equivalent measures to yield E945 million in 2011 and an extra E300 million in a full year. (This means bringing people who were considered too poor to have their incomes taxed into the income tax net.)

* A reduction of more than E2 billion in 2011 through reducing social protection expenditures (unemployment assistance, old age pensions, child benefit and other welfare payments).

* The government will “introduce legislation to reform [ie cut] the minimum wage by E1 per hour” and “enlarge the scope of the inability-to-pay clause”, permitting firms to invoke this clause more than once to allow them pay even less than the reduced minimum wage.

* The government will “reform the unemployment benefit system in such a way as to provide incentives for an early exit from unemployment”. (In other words, reduce, curtail or cancel unemployment benefit payments to drive people back to low-paid awful jobs with payment perhaps even less than the reduced minimum wage.)

* The government will introduce a more effective “monitoring of jobseekers’ activities with regular evidence-based reports” and “the application of sanction mechanisms for beneficiaries not complying with job search conditionality and recommendations for participation in labour market programmes, set in such a way as to imply an effective loss of income, without being perceived as excessively penalising, so that it would be credibly used whenever lack of compliance is ascertained”.

* The government undertakes “to introduce legislation to increase the state pension age” to 66 years in 2014, 67 in 2021 and 68 in 2028.

* The government will consider “an appropriate adjustment to [ the Croke Park agreement] to compensate for potential shortfalls in projected savings, arising from administrative efficiencies and public service numbers reductions”.

* In the 2011 budget, there will be a further lowering of income tax bands to draw even more poor people into the income tax net.

* There will be a property tax in the 2012 budget.

* There will be savings in the 2012 budget of more than E2 billion from further social expenditure reductions, cuts in public service numbers and public service pension adjustments.

* There will be water charges from 2012/2013 onwards.

* The government will introduce a “fiscal responsibility law” which will include provision for a “medium-term expenditure framework with binding multi-annual ceilings on expenditure in each area”. This will happen by the fourth quarter of next year.

* The 2013 budget will have further budgetary adjustments of over E3 billion, involving drawing yet more poor people into the income tax net, an increase in property tax, plus further reductions of no less than E2 billion in social expenditure, public service numbers and public service pensions.

* The nominal value of state pensions “should not rise over the period of the programme”.

* Ireland must make monthly reports to our IMF and EU masters on progress on the plans, and then three-monthly examinations on whether we are adhering to the disciplines.

This is not just national humiliation. It is national debasement, going far beyond what any of us envisaged even as the worst possible outcome.

And the brutality of it. Just look at the menace of the section dealing with a more effective monitoring of jobseekers’ activities. The impudence of it.

These well-paid high-flyers of the EU and IMF seeking to strike terror into people who have lost their jobs because of the barbarity of the economic system that these same highflyers espouse.

And the insolence of seeking to impose their will, not just for the four years of the “adjustment” programme, but far beyond, with the demand that we commit to increase the state pension eligibility age to 68 by 2028.

And to add injury to injury and insult to insult, we, the people - the sovereign authority in this republic - are allowed no say in whether to accept this programme for national debasement.

Even our national parliament is not allowed a say. There was an extraordinary exchange in the Dail last week, which seemed to capture the lunacy of it all.

John Gormley, Green Party leader, said: “It has been stated by deputies on the other side that the opposition has been placed in a straitjacket. That is an apt analogy in more ways than one. I warn those other parties that they should know when they enter government during this crisis, they will be entering an asylum. They will have to endure the sleepless nights, the no-win situation and the non-stop criticism.

“I have no doubt Deputy Gilmore will sit in my place next year, looking up at the Sinn Fein deputies who will be criticising him non-stop. All Deputy Gilmore will be able to say in reply, just as we have said, is that he has no choice but to act.

“There is nothing worse in a democracy when a politician must act in a way because his or her choices are limited. Deputy Gilmore will be faced with that lack of choice which will eat him up inside. I wish him well, but there is much awaiting him.”

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