Coalition frays ahead of budget

Tommy Broughan, who represented Dublin North-East in the Dail, has been expelled from the Labour Party after he refused to support an extension of the bank guarantee.

Thanks to its large majority, the Fine Gael/Labour Party government easily forced the unpopular move through the Dublin parliament.

The vote came ahead of the announcements of the national budget, and amid suggestions (subsequently denied) that the government would force senior bondholders in Bank of Ireland to take a loss on their investment.

Mr Broughan becomes the third member of the government to ‘go overboard’ since the coalition was formed earlier this year.

He said Labour would be better off in opposition.

“I argued very strongly that we shouldn’t enter the Government. That we should lead the opposition with our nearly 40 seats,” he said.

“We should fiercely oppose Fianna Fail and Fine Gael and prepare to take power down the line and have a Labour Government that was put there to represent working people to the nth degree.”

Speaking during the debate on extending the guarantee by twelve months, Sinn Féin finance spokesperson, Pearse Doherty TD accused Fine Gael and Labour of “the single biggest and most expensive political U-turn in Dáil history” and of writing “another blank cheque for the banks, including Anglo Irish Bank.”

“We are being asked to saddle the Irish state and the taxpayer with a unknown liability on top of the existing guarantee of 100bn euro,” Mr Doherty said.

“We are being asked to write a blank cheque for the banks, including Anglo Irish Bank. Given the volatility in the Eurozone it is highly likely that the scale of this liability will increase.

“Given the risk to the taxpayer involved in the bank guarantee this must be the single biggest and most expensive political U-turn in Dáil history.

“Of course today does not mark the U-turn itself. This sad event took place, behind closed doors in Government buildings in June of this year when the Cabinet agreed to extend the bank guarantee until the end of 2011.

“But today unlike in June, every member of the Government, including backbenchers, will have to vote on whether to breath a further 12 months of life into what is universally regarded as the most costly and the most damaging decision ever taken by an Irish government.”

Mr Doherty said the scale of the u-turn was “breath-taking, given the depth of opposition to the bank guarantee, particularly from the Labour party.

“If there is to be one single decision which represents the Labour party’s capitulation to the failed policies of Fianna Fail it will surely be this.”

The budget for 2012 will be unveiled in the Dublin parliament over two days by two different Ministers. Announcing what is predicted to be a very severe budget in two major government presentations is an unexpected break with tradition.

The budget cuts in public spending will be outlined by Minister for Public Expenditure and Reform, Labour’s Brendan Howlin on Monday. Then Minister for Finance, Fine Gael’s Michael Noonan will detail the budget taxation changes the following day.

The Dáil, which does not normally sit on Monday, is being convened on December 5th when Mr Howlin will outline what a Department of Finance spokeswoman described as “the expenditure side”. This will involve cuts in public spending in areas such as social welfare, health and education.

Mr Howlin has presided over a comprehensive spending review covering all Government departments since he took office last March and the outcome of that review will form the basis of his budget.

On the following day, December 6th, when it had been expected that Mr Noonan would deliver a normal-style budget speech, the Minister for Finance will outline the tax measures for next year.

The public will have to wait until day two to find out whether excise duty on the “old reliables” such as alcohol and cigarettes is being increased although it is already known that VAT on these items is going up by 2 per cent.

The sales tax increase has already been announced by Mr Noonan, who has also said that the rates of income tax will not be increased.

This new format is being adopted as part of the strategy of spreading the budget details out over more than a month. There will be a Dáil debate following both speeches, which are expected to be shorter than the traditional budget speech.

STATE OF THE STATELET

Meanwhile, a plan by the Taoiseach Enda Kenny to make a televised address to the people of the 26 Counties has been marked in confusion and indecision.

After announcements and reversals, he is now expected to deliver the address on state-run television on Sunday night. The live broadcast is expected to take place after one of the scheduled RTE news programmes.

There had been speculation that Mr Kenny might make his address before the hugely popular Late Late “Toy Show” special tonight, but Kenny’s handlers expressed concerns of a potential backlash over dampening the Christmas cheer.

‘TAKE A HOLIDAY’

Speaking in the Dáil, Sinn Féin Deputy Leader and Public Expenditure and Reform Spokesperson Mary Lou McDonald TD criticised the bizarre suggestion by one goverment minister, Leo Varadkar, that people take advantage of the budget to plan a holiday next year.

“To add insult to injury Minister Varadkar believes the only people who will pay the price of Budget 2012 will be Ministers and senior civil servants as the rest of us will all be off on yet another holiday.

“The Transport Minister’s comments are an insult to the 448,600 citizens who are now on the dole. Minister Varadkar’s comments are an insult to the 22.5% who are living in deprivation unable to heat their home during the winter months.”

She also condemned the approach of the Labour Party’s announcement of tokenistic reductions in ministerial pensions as part of the public austerity/bank bailout program.

“The Labour party are preparing to back a savagely unfair Budget. What is the purpose of Labour remaining in this government; is it just to act as a mud guard for Fine Gael and explain away their right wing policies and downright offensive views?

“We have seen this week the half-hearted measures this government has taken to tackle the pension’s scandal.

“Labour and Fine Gael, you’re going to take one euro a day off Ray Burke and leave former Taoisigh to live off 147,000 euro a year in what is nothing more than a tokenistic gesture.

“This government protects the high rollers whilst it lines up cuts to child benefit, increases in student registration fees and threatens to close community nursing homes across the state.

“All the while breaking the commitments you made to the electorate to get into office.

“Nine months in government and all Labour and Fine Gael have to show for their efforts is the same failed politics of their predecessors.”

Urgent Appeal