Faced with intense criticism over their failure to deal with the deep economic crisis in their first 100 days of office, the 26-County coalition leaders this week renewed promises to ‘burn the bondholders’ of two of the state’s nationalised banks, while vowing to maintain social welfare and income tax at current levels.
Speaking at a joint news conference at Government Buildings in Dublin yesterday [Thursday] afternoon, Taoiseach Enda Kenny said: “There will not be any income tax increases in the budget.
“I say that because it is fundamental to the Programme for Government and because it is necessary, in difficult times, it’s important that people have some planning to be able to put into their lives.
“For that reason, that element of the Programme for Government is one that we will adhere to very strictly and very clearly,” the Taoiseach said. Mr Kenny’s guarantee follows warnings from Minister for Finance Michael Noonan that he could not rule out tax increases or reductions in future budgets.
On Wednesday, Mr Noonan surprised commentators when he declared he would seek to share losses in the collapsed Anglo-Irish Bank and Irish Nationwide Building Society with the bondholders, the international investors who funded the institutions’ reckless lending.
Since the election, plans to impose burden-sharing on the bondholders were shelved as it emerged that the European Central Bank had required full remuneration of virtually all bank bondholders as a condition of its participation in the state’s 85 billion euro bailout loan deal late last year.
The ECB last night said it had no knowledge of Noonan’s new proposal, raising a question mark over the Finance Minister’s sincerity in making his declaration, which received worldwide publicity.
Frankfurt has not changed its resistance to any measures to impose losses on senior bonds, according to reports.
Sinn Fein leader Gerry Adams TD said that the first 100 days of the Fine Gael-Labour coalition government has been littered with broken promises and u-turns.
He said that: “The most serious u-turns were the decisions by the government to continue with the EU/IMF bailout and to hand billions of taxpayers’ money over to the banks.
“There is an understandable suspicion that yesterday’s u-turn on imposing burden sharing on senior bondholders: to burn these bondholders in Anglo Irish Bank and Irish Nationwide is a stunt to mark the 100 days of this government.
“But there are dozens more damaging u-turns in health provision and education, the introduction of water and household charges, and more,” he said.
“Fine Gael and Labour have adopted almost the entire economic policy of the failed and rejected Fianna Fail-Green government.
“They have failed to protect the most vulnerable, cut essential services and been at the beck and call of the EU/IMF.
“The government has demonstrated no leadership out of the crisis which is destroying the lives of working people.
“In just 100 days it is clear that the people deserve better than what this administration has to offer,” he added.
“We still have the Universal Social Charge; water and household charges are now firmly on the cards; the reintroduction of student fees is back on the agenda.
“The health service has been cut back to dangerous levels. The number of Special Needs Assistants has been cut back while taxpayers continue to subsidise private schools.
“Senior citizens too have been hit by the Government’s decision this week to raise the pension age to 68.
“This Government promised to stand up for ordinary people. They did the opposite.
“Labour and Fine Gael have sold out the electorate and are simply continuing with the policies of Fianna Fail which they criticised for so long while in opposition.
“The people deserve better than that.”