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Ireland's unrelenting austerity: we're not 'all in it together'

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If anyone thought that the election of a new Fine Gael/Labour coalition government might somehow soften austerity in Ireland they had better think again.

The recently announced Budget by the Taoiseach Enda Kerry has piled even more pain on Irish working people. Jimmy Kelly UNITE Regional Secretary quite rightly says that it is ‘a budget for the wealthy’ and ‘measures such as the VAT rise, the flat rate household charge and carbon tax increases will hit those hardest who can least afford it’.

Spending is being cut by a further €2.2 billion with €1.4 billion in public spending and the rest on capital spending cuts and €1.6 billion is being raised in taxes. Laughably Kenny says this is ‘a jobs budget’, since it will provide easier loans from the banks through loan guarantees to small businesses and a new micro finance scheme to help people start their businesses.

According to Kenny this scheme ‘will allow small firms to take on one or even two employees’. This is hardly an ambitious figure given the rising unemployment rate now standing at 14.5 per cent.

In fact, Kenny’s ‘jobs budget’ will mean a loss of even more jobs.

The public sector will be downsized by 23,000 by 2015. Next year will see 6,000 jobs will go. Amongst the victims will be 700 second level school teacher jobs. Community Employment schemes around the country will be hit with a 66 per cent cut endangering thousands of jobs.

In the latter case, materials and training grants for schemes providing vital services to children, the elderly, the disabled and disadvantaged have been slashed from €1500 per participant to just €500 for next year leaving many schemes struggling to survive in their present format.

This attack on the most vulnerable is a distinguishing feature of this budget prompting newly elected Labour TD Patrick Nulty to argue that it should have targeted the wealthy, ‘it is unjust, it hits people on low and average incomes disproportionately’.

Indeed, Nulty was expelled from the Labour parliamentary party for voting against the cuts and becomes the third Labour TD to fall out over the cuts.

Other attacks on working class living standards include a hike in VAT which always affects the poor more than the rich. Another regressive tax is a new €100 yearly charge on owners of properties.

Child benefit for larger families is cut so for example a family with 4 kids will be €800 worse off a year. School allowances for 2 and 3 year olds have been scrapped.

The public sector wage bill is reduced by €400,000 million.

In summary, the Department of Health is taking the biggest cut of €543 million, social protection with an adjustment of €475 million and education with €132 million.

Troika Tyranny

The humiliating defeat of the corrupt and incompetent Fianna Fail administration in March has not altered Ireland’s subservience to the terrible Troika of the IMF, ECB and the EU one jot. On the contrary, the new Budget has been constructed with the full support of the IMF and Brussels.

Several bouts of austerity under Fianna Fail eventually culminated in last year’s rescue or bail out package from Brussels. Effectively a €90 billion bail out with external oversight for three years. Of course, the new treaty and plans for fiscal unity being hatched by France /Germany will make that ‘oversight’ even more permanent and unjust for the people of Ireland.

Fine Gael and Labour had made it perfectly clear during the election campaign that they would not be questioning the fundamentals of the bail out package. They even voted for Fianna Fail’s Finance Bill before the election that rubber stamped Brussels austerity. There are no cries now from Fine Gael of losing Ireland’s sovereignty to Brussels as they did in opposition.

Underlying all the main parties’ positions is the false belief that sufficient austerity can lift Ireland out of its present mess. It is argued cutting the deficit combined with a push for export led growth would put the economy on the road to expansion again.

But the Economic and Social Research Institute (ESRI) latest report suggests that the current Eurozone crisis will hit Ireland’s growth hard.

A slight rise in exports can not be relied on when domestic demand is so weak and more austerity will weaken it even further. Export led growth also depends on a recession free European market.

In fact, austerity simply bails out the rich. The stark reality is that Irish impoverishment continues unabated. Emigration is reaching one hundred a day, more than 40,000 left Ireland in the year up to April 2011, up 45 per cent on the previous year. The unemployment rate does not take into account the number of people who have had to emigrate but it has still climbed to 14.5 per cent.

The main parties – Fine Gael, Labour and Fianna Fail – will pick no quarrel with their imperialist masters in Brussels. Just like their willingness to bail out Irish banks at the expense of Irish workers, they will do all in their power to safeguard capitalism on Irish soil.

Building the resistance

If Ireland’s parlous condition smacks of Greek economic woe unfortunately the level of resistance compared to Greek workers has been less characteristic.

There is no lack of anger and desperation at the austerity attacks. But the trade union leadership has utterly failed to give a fighting lead and build a serious defence of working people. At root this stems from a refusal to challenge the notion that workers must make some contribution to pay for the crisis.

The Irish Congress of Trade Unions (ICTU) has long cried out for everyone to make a sacrifice. Their pre Budget Submission is based on the need to ‘reduce the deficit gradually’, pathetically calling for the deficit target of 3 per cent to be prolonged by a whole year! Congress general secretary David Begg referred to the ‘dead hand of austerity’ and said of the budget that it ‘contained nothing that would help breathe new life into the economy and kick start growth’.

However, the ‘dead hand of the trade union bureaucracy’ could not even raise the spectre of what trade unionists might do to stop the latest attacks. There is no campaign of resistance from these ‘leaders’. No doubt tied as they are to Labour Party policy, they do not start from the assumption that Irish workers are not to blame for this crisis. The bankers, the bondholders, the whole fat cat capitalist class are the culprits and the rotten system of capitalism they profit from.

The role of the trade unions is not to supply smarter ideas on growth and deficit reduction, i.e. cuts, to make capitalism safer. On the contrary it should be to propose a strategy to defend workers which necessarily means at the expense of the capitalists.

It is important that Irish socialists spell out a fighting alternative to the current misleaders. Rank and file opposition must be built within all the unions to rally workers in a campaign of industrial action to defend their interests from further cuts and job losses. They must do this ‘with their leaders if possible, without them if necessary’. A movement against the dictates of the Troika and their agents in Fine Gael/Labour must be built on the streets and in the workplaces.

At the very least we should emulate the fantastic one day strike in the six counties in the north of Ireland when more than 100,000 workers struck against British government cuts on November 30.

A do nothing approach from the trade union leaders is not an option. We need to make a stand urgently if workers are not to suffer utter impoverishment and irreversible decline in their living standards. A campaign of resistance would best be served by action councils to coordinate strikes and all resistance to the government and the Troika. A campaign of direct action leading towards a general strike must be the objective with strike committees democratically controlling the action.

In such a struggle it would then be clear to many that a genuine workers government based on workers councils should be formed. A government that would cancel the debt, refuse to pay the bankers and the bondholders and taxes the rich. Such a government based on workers’ councils could start the task of building a socialist workers’ republic in Ireland free from imperialist rule.