[Sinn Fein]

Cothrom san Aois Nua

Equality in a New Century

Sinn Fein Pre-Budget 2000

Economic Statement
and Submission
to Minister for Finance

Launch Date - 24th November 1999

A summary of this document is available here

1. Introduction

On the eve of the new century and the new millennium there has never been more optimism about the present health and future prospects for the Irish economy. No government in the history of the 26-County State has had such a large budget surplus as that which the Fianna Fail/Progressive Democrats Coalition now possesses, the third such surplus since it took office. Once again it has a huge opportunity to create fundamental and lasting change, the change from inequality to equality in Irish society.

The truth which must be recognised is that the ongoing economic upturn is happening in an economy which is warped by structural inequalities. The Celtic Tiger hype ignores these inequalities but they persist. The improved conditions for many sections of our society, and the conspicuous luxury enjoyed by a minority, contrasts sharply with the plight of those who have not been allowed to benefit.

If economic inequality in Irish society is to be ended then the government needs to take a more pro-active role in the economy. To establish a secure future for the children of the nation structural inequalities must be removed. This means that government policy must shift from merely modifying the excesses of the market to becoming the main driving force leading to a new society on our island.

Budget 2000 comes at a time of three other important developments with profound long-term implications:

The Good Friday Agreement has the potential to transform politics and society in Ireland as a whole. The peace process has had a beneficial effect on the Irish economy on both sides of the border. Further progress will bring further benefits only if government policy ensures that it does.

The All-Ireland institutions, when established, must be fully worked and cross-border development accelerated, with special emphasis on the needs of the disadvantaged border region.

If the `National Development Plan' is to be truly National then the chapter on North/South co-operation must not only be fully implemented but significantly expanded. The creation of an island economy must be made central to the National Development Plan.

Sinn Fein believes that the series of agreements between governments, trade union leaderships, farming organisations and employers have operated to the disadvantage of most workers. The ability of the labour force to mobilise its strength was thwarted and the wages of many workers were kept artificially low. However now that the majority of trade unions have voted to enter the negotiations it is vital that the balance is redressed. There must be real increases which benefit low-paid workers most of all and any new agreement, if it comes, must make the elimination of poverty its first priority. Budget 2000 will be a test of the government's willingness to deliver on that priority.

Sinn Fein believes that in Budget 2000 the government must use its unprecedented resources to:

2. Radical action to tackle the Housing Crisis

One of the primary failures of the current government has been its lack of effective action to tackle the biggest housing crisis in our history. Proposals in the Planning and Development Bill for provision of a proportion of social housing in private developments have been presented by government as a panacea for the crisis but they are already mired in controversy with the government backing down in the face of opposition from the construction industry.

Plans for 22,000 local authority dwellings over the next four years are totally inadequate, and would not even cater for the current waiting list, let alone the expected increase in need. Tinkering at the edges of the private housing market will not address the current crisis. Sinn Fein proposes:

3. Taxation justice

Sinn Fein believes that the vast majority of citizens are glad to see their taxes used for progressive public spending, improving services for all and assisting the least well off in our society. We refuse to join the simplistic chorus which calls for giveaway tax cuts and which thereby spurns the opportunity of the current economic climate to make real social progress. What we need is taxation justice not taxation reduction.

After a very disappointing first budget from this government there was some progress in Budget `99 towards taking the lower paid out of the tax net. But much, much more needs to be done. The gap between the higher and the lower income groups has widened. It is essential that two measures are undertaken by the government. First, to increase significantly in this Budget the level of income at which people enter the tax net. Second, to introduce the minimum wage at the rate of 5 per hour with a firm commitment to increase this very modest rate in due course.

This past year has seen unprecedented revelations about how the banks have actively encouraged and assisted the wealthy in our society to evade tax and deprive their fellow citizens of funds needed to provide public services. The Minister for Finance should impose an increase in Corporation Tax for Irish retail banks and finance houses with the resulting tax funds earmarked for community and local development projects in the most disadvantaged areas throughout the State, such as the Border region.

Sinn Fein believes that with record exchequer returns this is the best possible time to take those first steps towards creating an equitable taxation system in Ireland.

Income tax

Throughout the 1990s there have been marginal cuts in the rates of income tax; many workers have benefited as both the top and bottom rates of tax were cut. Alongside this there has been a small amount of progress on taking low-paid workers out of the tax net altogether.

These changes amount to tinkering with an inequitable system. The cuts in marginal taxes have manifestly benefited the higher paid workers more than any other sector. This is clearly not fair. This year the government should devote funds for income tax cuts to increasing the personal tax allowances of workers. All workers would benefit from this and low paid workers would finally begin to see the real benefit of tax reform.

Corporation Tax, Capital Gains Tax and rent control

Sinn Fein proposes:

The idea behind these proposals is that throughout the 26 Counties there are possibly tens of thousands of homes that have been bought purely as investment vehicles. They are not family homes. The owners of such dwellings have seen a huge rise in the money value of their assets. They have also been able to enjoy a hugely increased income stream from the houses in the form of rent. In many cases the rent being paid on the house bears no relation to the cost borne by the speculator who purchased It.

The Department of Social Welfare is also in many cases subsidising the income generated for these speculators through rent allowances paid to landlords by tenants. Rent control linked to the house purchase price, not its current market value, would help protect tenants, especially those in Dublin who have seen rents spiral upwards over the last two years.

An increase in capital gains tax on speculators who own multiple dwellings would encourage them to take advantage of their windfall asset value increase and they would sell the house before the tax is implemented. This would have two effects on the housing market in Dublin.

One would be to free up much needed houses in the South Dublin and other council areas. It would also help deflate housing prices. The rent control proposal would amplify these effects.

We are not suggesting an increase in capital gains tax for owner-occupiers. We are only looking to levy the tax on multiple dwelling owners. The Capital Gains Tax legislation has in the past allowed for many special cases where the tax was levied at a preferential rate in certain cases. We are looking for a targeted higher rate which would be beneficial to society as a whole. It would not cause a disinvestment in real economic activity but would penalise speculators whose profits are in many cases exploitative.

Stamp Duties

Sinn Fein proposes the abolition of Stamp Duty on houses whose 1999 value is 150,000 or under and index-linking stamp duty thereafter, to a related base value.

Thousands of first-time buyers in Ireland find that among the hidden costs of auctioneers and solicitors' fees there is an added sting in the tail of a requirement to pay stamp duty. This can add thousands of pounds to the purchase price and mortgage repayments of many Irish families.

The government makes some revenue while banks get more profits out of the increased monthly repayments home owners must make when they increase their borrowings to cover the stamp duty costs. Sinn Fein believes that stamp duty should not be levied on the cost of a basic family home. It is an unjust tax on families.

Other tax measures

4. Agriculture - development not dependency

Sinn Fein believes that there is no reason why the Irish rural economy should not be dynamic, empowered, thriving and providing rural communities with an adequate standard of living and maintaining the maximum amount of families on farms. But across rural Ireland thousands of farmers are leaving the land. There is something fundamentally wrong when on the one hand the 26 Counties has a highly profitable and internationally competitive agribusiness sector while at the same time thousands of Irish farmers are being told their farms are not commercially viable.

The collapse in produce prices has not been matched by a parallel decrease in shop prices for foodstuffs. If others are making profit from the farmers efforts then it is up to the government to intervene and ensure that Irish farmers are not being exploited in the marketplace.

Sinn Fein proposes that this year's budget must address itself to both the immediate serious difficulties faced by Irish farmers as well as taking further steps to ensure the long term economic future of rural communities.

Sinn Fein proposes:

Special Financial Rescue Measure for pig farmers in the border counties.

5. Social Welfare - moving out of poverty

Sinn Fein TD Caoimhghín O Caoláin opposed the 1999 post-Budget Social Welfare Bill because it failed the test of the National Anti-Poverty Strategy, which states that social welfare must ``provide sufficient income for all those concerned to move out of poverty and to live in a manner compatible with human dignity''.

The key phrase here is ``moving out'' of poverty. The level of social welfare increases in the last Budget did not help people to move out of poverty; they kept social welfare dependents lagging behind the rest of society. Given the related failure of successive governments to deal with educational and employment disadvantage the message from the Social Welfare Bill and the `99 Budget was, at best, ``as you were''.

A key aim of the Social Welfare system must be to eliminate poverty and Budget 2000 is the present government's third opportunity to make major progress towards doing so. This should be done by ensuring that those dependent on welfare have a decent income and that those who have the potential to move away from welfare dependency can do so with the assurance of improvement in their circumstances.

Up to 1.5 million people in the 26 counties are dependent on social welfare payments. They are not just the unemployed but pensioners, people with disabilities, widows and widowers, lone parents, farmers with small holdings, the self-employed on low incomes and lastly but most importantly the children of these groups.

Sinn Fein believes that the current social welfare payment levels are clearly inadequate to sustain an individual in adequate living conditions. The 1999 Budget finally implemented the 1986 Commission on Social Welfare recommendations for the minimum level of payments. But these recommendations have long been overtaken by the growth in the economy. Between 1994 and 1998 social welfare increased by 16% compared to a 22% growth in average income. The gap between those dependent on welfare and those in full-time employment has widened. Sinn Fein proposes:

Increase Qualified (formerly Adult Dependent) Payments to 70% of personal rates. Increase to 90 per week the allowable earning for a Qualified Adult.

6. Health for all not health for wealth

The nurses strike dramatically highlighted structural inequalities within the health service. This affects both health service providers and patients. Huge medical advances in prevention and treatment have been made but we still have a system where those with wealth can gain immediate access to the best care while everyone else must take their place in the hospital waiting lists.

Private medical care targeted at the most well off in our society is prospering. At the same time - and despite the current upturn in the Irish economy - the public health system is lagging behind. This means that if you want a vital test or operation and you are on the medical card or dependent on the public hospitals you will have to wait months or even years but if you have the money you can book into a private clinic and get treatment next week.

There are tens of thousands of people on hospital waiting lists in the 26 Counties. At the same time hospital beds and operating theatres are closed in many hospitals. There is a severe shortage of nurses. Hospital staff, especially nurses and junior doctors are forced to work extremely long hours which creates a real danger to the welfare of both patients and staff. All this points to three major ills in our health system: lack of long-term government planning and bad management and organisation of the services; inequality within the system; underfunding.

The resolution of the nurses' strike has dealt with only a part of the problem. Structural inequality remains. Sinn Fein proposes:

7. Education - seize the moment

It is in the field of education above all that the present health of the Irish economy can be used to most advantage. None of us knows what the economic future holds so it is essential that the school-going children of today gain the maximum benefit from the ample finances now in government hands. This will be a sound investment, equipping the working citizens of the future to weather the economic storms which may come.

Sinn Fein proposes:

Third level proposals:

See also Section 10 - Caring for Children.

8. An Ghaeilge

Bhí sé geallta ag an rialtas Bille Teanga a chur os comhair an Oireachtais I 1999. Anois ní bheidh sé ann roimh deireadh 2000. Tá sé seo míthaitneamhach. Bheadh sé mar chuspóir ag an Bille seo ní hamháin cearta teanga a chosaint ach iad a chur chun cinn. Taobh leis an mBille tá gá le maoiniú ceart don Ghaeilge ón Stát. Le blianta beaga anuas tá an maoiniú seo tar éis sleamhnú. Má leanann an sleamhnú seo ní bheidh an Stát féin ná earnáil dheonach na Gaeilge in ann Bille Teanga a chur i bhfeidhm.

Molann Sinn Fein

The Irish Language

The government promised an Irish Language Bill in 1999 but now we are told it will not be ready before late 2000. This is totally unacceptable. The aim of this Bill would be not only to defend the rights of Irish speakers but actively to promote them. Alongside this Bill there is a need for State funding for Irish. In recent years this funding has decreased. If the decrease continues then neither the state nor the Irish language voluntary sector will be in a position to implement a Language Act.

Sinn Fein proposes:

9. Supporting the most disadvantaged

The rights and needs of people with disabilities and their carers must be a government priority. Recognition needs to be given in particular to those who care for the mentally handicapped at home, thus saving the State hundreds of millions of pounds annually.

10. Caring for Children

Childcare is one of the most hotly debated issues of our time. Too often the debate has focused only on the needs highlighted by the increase in employment and the entry of a much greater number of parents into full-time employment. These needs are great and they must be met but they are not the whole story.

We need to put children back at the centre of the childcare debate. The priority of all must be the provision of the best care at all times for all of our children. That includes care by parents in the home, care by other family members, paid care by childcare workers in the home, early childhood education, crèches and other facilities provided by the community or voluntary sector or by private concerns.

Sinn Fein fully supports the call of the Childcare 2000 Campaign for a Childcare Strategy which values equally all children and parents, ensures the provision of quality regulated childcare services and prioritises the needs of children and families experiencing disadvantage and social exclusion. We need to establish a State-assisted and state-wide Childcare Service, in urban and rural areas, in tandem with existing service-providers such as the Border Counties Childcare Network.

Pending a comprehensive Childcare Strategy and the establishment of a Childcare Service, the Budget must include immediate action to redress the woefully inadequate provisions for childcare in this State. It must:

Target special funding for childcare services in disadvantaged communities.

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