14 November 2001
Sharing the Wealth
Dáileadh an tSaibhris
Sinn Fein Pre-Budget 2002 Submission
- All-Ireland Economic Development
- All out attack on the Housing Crisis
- Taxation Justice
- Agriculture and Rural Development
- Social Welfare - Moving out of Poverty
- Towards Free Health Care for all
- Equal Access to Education
- Supporting People with Disabilities
- Making Childcare a real priority
- An Ghaeilge
Budget 2002 is being framed in a dramatically changed economic climate. The unprecedented growth in the economy during the past five years has slowed to a standstill in the space of a few months. It remains to be seen if this slowdown can be halted and reversed. One thing is certain. It will have little adverse affect on the wealthy in our society who have been generously rewarded by the current government in every Budget since 1997. But for those on average or below average incomes the economic slowdown is already a reality they are ill-equipped to cope with thanks to the failure of the government to use economic growth to create equality.
The October 2001 Central Statistics Office Family Household Budget Survey clearly shows the level of inequality where the bottom 10% of households have to get by on £15 a day, while the wealthiest 10% have over £150 a day to spend. The survey also found that the income of the wealthy had far outstripped the growth of the poorest in our society and that 38% of pensioners were now among the least well off in our society.
The Fianna Fáil/Progressive Democrats government has had two enormous advantages enjoyed by no previous government in the 26 Counties. Firstly, it has been in office at a time of exceptional prosperity resulting in budget surpluses in four successive years. Secondly, despite its slim Dáil majority, it has been able to plan for five budgets in a row.
Those advantages have been scandalously squandered by the FF/PD Coalition government. Not only has it failed to tackle the structural inequalities which warp our economy and damage our society, it has actually worsened those inequalities and widened the gap between rich and poor.
In our first Pre-Budget submission to this administration in 1997 Sinn Fein stated that there was never ``a more favourable economic climate in which to cultivate equity and share prosperity''. Instead the government began its term of office by giving record tax cuts to the highest earners and cutting taxes for big business. It repeated that exercise in each of its budgets.
In 1998 we urged that the Budget should dramatically improve ``the quality and quantity of services provided by the State in health, education, housing, social welfare, infrastructure and employment creation''. But Budget 1999 led us to state that ``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''.
In Budget 2000 three times more was spent on tax reduction than on social welfare increases. In Budget 2001 there was a further reduction of 2% in the top rate of tax and yet again those who needed it least benefited most from tax cuts. It has been estimated that the gap in disposable income between a person earning £40,000 a year and a person who is unemployed has been widened by £159 a week by the present Government since it came to office.
After four FF/PD Budgets the Economic and Social Research Institute had to state in July 2001 that the ``high rate of relative income poverty is a serious structural problem that needs to be tackled while the resources are available''.
There has been accelerating economic growth since this government came to office in 1997 but -
- a quarter of our children and a fifth of our adults are in households with less than half the average income.
- the government presides over a crisis in our unreformed and under-resourced health services and a housing nightmare for the 50,000 households in need of accommodation.
- a United Nations report published in July 2001 found that we have the most unequal distribution of wealth of any industrialised state outside the USA.
This is the unequal society which now faces recession. And already we hear voices calling for belt-tightening and fiscal rectitude - the chorus that in the past meant cuts for the low paid and those on social welfare. The wealthy have been well cushioned against recession by this government. Those on lower incomes have seen neither the substantial direct gain in wages nor the improved services which they need at a time of economic uncertainty. They demand justice now.
In Budget 2002 the Fianna Fáil/Progressive Democrats Coalition government has its last opportunity to do what it has failed to do thus far - significantly redistribute wealth in our society. Such redistribution is even more necessary as we face an economic downturn.
Sinn Fein believes the priorities in Budget 2002 must be:
- Concentration of resources on much needed improvements in health, housing, social welfare, education and childcare services which enhance the quality of life of all citizens.
- Tax reductions for the low paid only; no further reductions for the higher earners; restoration of just taxation levels on big business.
All-Ireland Economic Development
The Good Friday Agreement is an all-Ireland Agreement.
Through the new political institutions created under the Good Friday Agreement there is growing all-Ireland co-operation in the crucial fields of economic development, education, health, environment, agriculture, transport and tourism. In each of these areas we have already seen progress and programmes of work are being advanced through the implementation bodies.
The potential is obvious and it is clear that an all-Ireland economy would bring about considerable benefits to all living on the island.
It is essential that such co-operation continues.
Sinn Fein believes that the Irish Government should:
- Seek to expand the all-Ireland areas of co-operation.
- Develop the potential provided by the implementation bodies.
- Make available the appropriate financial and other resources to ensure that substantial progress can take place.
All-out Attack on the Housing Crisis
``The ever-widening increase in income inequalities and resources is nowhere more evident today than in the case of housing. One of the results is that home ownership is now beyond the reach of most people on average incomes. This in turn is adding to the pressures of an already over-stretched social housing sector.''
These are the words of the Report on Social Housing published by the National Economic and Social Forum (NESF). The NESF represents a broad cross-section of society from trade unions to employers, from farmers to local government members, community and voluntary groups. Even such a diverse group was able to agree that at the root of the current housing crisis is the Government's failure to provide social housing - that is houses built by the local authorities and housing co-ops.
Incredibly, given the massive need we see all around us, only 8 per cent of all houses are being built by the local authorities or voluntary sector. This is by far the lowest share for any period in the past century. Since 1996 the number on local authority waiting lists has risen by 43 per cent.
House prices in the private market increased by an average of 15 per cent in 2000. This drove more people onto local authority waiting lists and into private rented accommodation. While house prices have moderated somewhat in 2001 this has done nothing to ease the crisis.
People in private rented accommodation face poor living conditions, high rents and no proper security of tenure. Unscrupulous landlords can let sub-standard property for high rents and evict tenants with little difficulty. These landlords are being subsidised by taxpayers to the tune of over £100 million annually in rent supplements under the Supplementary Welfare Allowance Scheme.
The Commission on the Private Rented Sector presented its report in July 2000 but well over a year later the government has failed to take action even on the limited proposals of the Commission. Tenants are being left to suffer.
New house starts are down by some 20% in 2001. The slowdown in the private housing sector provides an opportunity for the government to use the available capacity of the construction industry to attack the housing crisis by increasing resources for public sector housing.
Therefore Sinn Fein's key housing recommendation which should be acted upon in Budget 2002 is:
- Major renewed State investment in a comprehensive Social Housing Programme, with front-loading of funding under the National Development Plan to allow the local authorities to house our citizens.
We also call for:
- Target for elimination of waiting lists by local authorities, with an immediate target of 70 per cent of applicant units to be provided with suitable accommodation within two years of their being on the list.
- The control of land prices with a statutory ceiling on the price of land zoned for housing to stop speculation and reduce house prices. A Constitutional amendment to allow for this if necessary.
- Statutory control of rents in the private rented sector, strengthened laws to set standards for accommodation and more resources to implement those regulations.
- A renovation grant of up to £5,000 to assist home-owners to improve their properties.
- A special grant to encourage utilisation of urban and rural derelict sites for new domestic dwellings.
Sinn Fein has been an untiring advocate of real tax reform and the creation of a just tax system in the 26 Counties. For the past decade the agenda of successive governments has been to implement tax cuts rather than wholesale tax reform. It is true that many ordinary workers have benefited from these cuts and widening of tax bands. Yet by far the greatest beneficiaries have been those on high incomes. These elite groups have benefited disproportionately from cuts in the higher rates of tax while still enjoying access to legal tax shelters and tax avoidance schemes that are not available to the vast majority of Irish workers.
November 15th, 2001 is the last deadline for the 50,000 holders of bogus DIRT accounts to come clean to the Revenue Commissioners and take advantage of what is yet another tax amnesty for the defrauders and white-collar criminals who have been robbing they the Irish taxpayer. It is ironic that the estimated £700 million take from these tax evaders is only slightly less than the £750 million the Coalition promises to increase day to day health spending by in 2002. We need an end to amnesties and a new beginning in our tax code.
At the same time, over the last few years the Irish taxpayer has witnessed ongoing revelations of abuse of the tax code. This covers everything from uncollected taxes to the revelations in the McCracken and Moriarty Tribunals and the Public Accounts Committee DIRT inquiry. These three forums have shown a range of illegal tax evasion schemes, offshore money-laundering schemes, and unlicensed private banks covertly operating out of the offices of one of Ireland's premier companies.
It has been clearly shown that the private and public banking companies have at times been active participants in systematic tax fraud. Their activities were compounded by a regulatory system that, at worst, was unwilling to tackle tax fraud and was, at best, incompetent and unable to enforce the tax laws of the State.
Sinn Fein believes that Budget 2002 presents a golden opportunity to accomplish two things:
- Take the low paid completely out of the tax net.
- Initiate a complete reform of the tax system, focusing on all areas of the tax code, including the loopholes and tax avoidance schemes built into the present system.
Such a reform process would include local government. It would stop the creeping forms of double taxation being reintroduced into the tax system by local authorities seeking to levy communities for spending shortfalls deliberately created by parsimonious central government policies.
The remit and record of both the Central Bank and the Revenue Commissioners should also be re-evaluated as part of this reform process.
Unlike previous years when widespread tax cuts were introduced this year all is changed and suddenly a new economic orthodoxy has emerged.
There can be no more tax cuts we are told, and what is available will only go to either widening tax bands or lowering the lower rate of tax. Already these proposals have been presented as some sort of deal for the low paid. It is nothing of the sort. A real income tax deal for the low paid would involve a much more radical realignment of tax rates, bands and the array of special tax breaks offered to the higher income earners.
A fair tax cut is one which puts exactly the same money in each worker's pocket, regardless of whether they are high paid or not. This way those on low incomes will finally begin to take the first steps towards a fair deal.
The Dublin Government must also recognise that many low-paid workers are not just young workers or part-time employees. They also include many thousands of full-time working adults who have families to support with all the costs of housing, health, education and childcare that that entails.
Sinn Fein proposes one clear-cut radical measure to tackle low-pay poverty - major increase in tax free allowances. A reintroduction of substantial tax-free allowances for dependent children is also a must.
Corporation Tax, Capital Gains Tax and Rent Control
Sinn Fein proposes:
- No more cuts in Corporation Tax or Capital Gains Tax. The level of Capital Gains Tax should be restored to its 1997 level of 40 per cent, except in the case of speculative housing, where a further 12-month lead-in period should apply.
- Increase Capital Gains Tax on speculative owners of multiple dwellings. Such a tax would be introduced on a phased basis over two years at 40 per cent in April 2002, and 60 per cent in April 2003.
- Rent control linked to the year of purchase and asset value of a dwelling.
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 these properties 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, Community and Family Affairs is also in many cases subsidising the income of 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 change 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 special cases where the tax was levied at a preferential rate. 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 profit levels are in many cases a result of exploitative intent.
Other tax measures
- Tax relief on personal donations to domestic charities.
- Allow charities to reclaim VAT
- Reform of Inheritance Tax to ensure that those inheriting homes from close relatives are exempt. Beneficiaries should include children and partners in relationships where the couple were not legally married.
- Government support at European Union and United Nations level for the idea of the `Tobin Tax', a tax on international financial speculation with revenue to be used to promote development in the poorer regions of the world. Proponents of the Tobin Tax used to be ridiculed but this year even the conservative, right-wing International Monetary Fund has recognised there is a need to discuss the proposals.
Agriculture and Rural Development
Ensuring a Future for Farming
Sinn Fein believes there is an urgent need to act and formulate a strategy to resolve the crisis in Irish farming. Across Ireland, rural communities are disappearing. Families are leaving the land because their holdings are deemed not to be commercially viable.
It is still too early to estimate the full effect of the Foot and Mouth crisis on the rural economy and society. The crisis did show that the government can act swiftly and dynamically when it wants to.
Over the years since the last GATT Treaty in 1993, successive governments have been involved in a holding operation, seeking to maximise the gross amount of EU grant aid funding for farming. There has been little thought given to the inequities of how these funds are distributed or of their long-term impact on Irish farming.
Last year the Minister for Agriculture and Food announced over £16.7 billion in spending on farming over the next five years. Elements of the plan such as the Rural Environment Protection Scheme (REPS) and the £532 million earmarked for forestry are welcome. But there needs to be a recognition that, in order to succeed, any new programme on rural development needs to be built up and developed by the communities directly affected by rural underdevelopment.
Sinn Fein believes that the core objectives of any rural development programme should be:
- Creating a co-ordinated programme that links agriculture, enterprise, environment, culture, health and education and social services strategies into a comprehensive integrated rural development project.
- Keeping the maximum amount of people on the land and preserving the social fabric of rural life.
- Creating the conditions where rural communities themselves can rebuild their local economies.
- Ensuring that everyone has a dignified standard of living, access to proper education, housing and health resources.
- Real reform of the CAP - the CAP funding mechanisms must be changed to help small farmers.
- A significant funding initiative to promote organic farming in Ireland. Organic farming becomes commercially viable on a much smaller acreage than current farming practices. Such a programme will promote rural repopulation and could be a vital element in breaking the current cycle of rural underdevelopment. Broadleaf forestry projects should also be promoted.
- A policy of encouraging a return to co-operative agricultural projects should be vigorously promoted and supported.
- Matching funds for rural enterprise projects. Currently the bulk of funding for economic development goes to foreign-export-orientated companies. There should be equity in the allocation of funding for enterprise projects. Funding for indigenous enterprise projects have been cut in recent years.
- Ending discrimination against local enterprise projects. There is also another level of discrimination in domestic funding mechanisms. Enterprise Ireland, the agency responsible for developing indigenous business, currently favours aiding businesses with export potential, overlooking the community and social enterprise sector. This form of economic discrimination should end.
- An Increase in LEADER funds. The success of rural development projects under the EU LEADER programme is well recognised. However, such community-orientated funds only account for 7 per cent of the funding coming into the 26 Counties over the next seven years. LEADER funds are a vital part of any rural regeneration programme and should be the substantial part of EU funding flowing to rural areas.
- A National Conference. The crisis in rural Ireland is one that must be acted on now. Government should be prevailed upon to hold a national conference that could formulate a strategy to promote rural development in Ireland. Such a conference would have to be organised on a truly participatory basis and not be solely representative of the vested interests that dominate agri-business and rural policies today.
In addition Sinn Fein proposes:-
- Extension of the Rural Renewal Scheme to all disadvantaged rural areas.
- Major investment in the Rural Development Fund as proposed in the White Paper on Rural Development. This would evaluate the extent of rural poverty and initiate action to tackle it.
- Ending of upper income unit limit for young trained farmers to qualify for Installation Aid.
- A scheme of low-interest-rate loans for farm improvement and investment to encourage young farmers to stay on the land. (This is the second phase of the EU Installation Aid scheme which was never introduced.)
- A Rural Housing Strategy, including a renovation grant for those who wish to refurbish/rebuild derelict dwellings.
Social Welfare - Moving Out of Poverty
Sinn Fein believes that progressive social welfare spending should aim to eliminate poverty. In Budget 2001 the government cut the top rate of tax at a cost of £163 million. For less than £150 million the government could have raised the basic social welfare rate by £14 per week for a single person and £24 per week for a couple. It made the wrong choice.
Sinn Fein proposes:
- Increase the personal rates of basic social welfare payments by £14 per week for a single person and £24 for a couple.
- Increase the personal rate of Contributory Old Age Pension by £10 and provide larger increases in other age-related payments.
- Non-Contributory Old Age Pension to be means-assessed on an individual basis (i.e. husband or wife to be assessed against their own generated income and not that of their spouse or partner).
- Increase all Qualified Adult Allowances to 70 per cent of the personal rate.
- Increase to £90 per week the allowable earning for a Qualified Adult.
- Special measures to combat fuel poverty, including a lump sum as initial instalment of Winter Fuel Allowance to assist welfare recipients to build a stock of fuel. A comprehensive assessment of fuel poverty is necessary to assess and address need, especially for older people in accommodation which does not benefit from installation of central heating by local authorities.
- Asylum seekers who choose to leave designated accommodation should receive Social Welfare Allowance and Rent Allowance on the same basis as other individuals living in the State. Payments to asylum seekers who choose to remain in designated accommodation should be increased substantially (to say, £40 per week per adult).
- Budget 2001 should be poverty-proofed and the outcome of the poverty proofing process should be made public.
For Child Benefit, Child Dependant Allowances and childcare related measures see Section 10 - Make Childcare a Real Priority.
Towards Free Health Care for All
Private medical care targeted at the most well-off in our society is prospering. The public health system is lagging far behind. There are tens of thousands of people on hospital waiting lists in the 26 Counties while 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; and the legacy of years of under funding.
We welcome further government moves to reverse under-funding. But comprehensive action is needed on many fronts.
We need reform of training, staff organisation, work practices and pay at all levels in the health services to end inequality. Such inequality includes that between well-paid consultants, who operate profitably in both public and private practice, and the hard-pressed staff of public hospitals who do most of the healthcare work. The grip of a minority of consultants on the purse-strings and organisational structure of the health service must be broken.
Sinn Fein believes the government should be eliminating the two-tier, public/private system in health and moving towards an Irish National Health Service with free healthcare for all, funded from central government tax revenue. This would be in the context of extended co-operation and integration of health systems on an all-Ireland basis. There can be no more important use made of taxpayers' money.
In Budget 2002 Sinn Fein urges two major steps:
- The extension of medical card eligibility to all those on or below the minimum wage and to all persons under 18 years.
- Increase in health spending in the Budget designed to eliminate waiting lists.
Equal Access to Education
The Higher Education Authority reported in 2000 that there had been no significant improvement in the number of school-leavers from poor backgrounds reaching university over the past five years. The figures show that of 14,000 students graduating from universities in this State, only 2.2 per cent come from households headed by an unskilled or semi-skilled worker. From the first rung of the education ladder at Junior Infants children of low income families carry a burden which means that they never reach the top rung at third level.
The abolition of university fees has done nothing to help the children of the least-well-off to get into college. They still cannot get to the starting line because of the prohibitive costs of going to college. They cannot live on the totally inadequate grants now available. Students from outside the university cities face the additional disincentive of the acute shortage of accommodation and the high cost of that accommodation if they are lucky enough to obtain it.
The Government must act to allow access to university to all on the basis of educational merit. It must provide increased maintenance grants to students from low-income backgrounds. It needs also to initiate special measures to provide student accommodation in the context of addressing the overall housing crisis.
Sinn Fein proposes:
- Continuing overall priority and increased budgetary provision for primary education.
- Increase primary education funding from £50 per pupil per year to £120 per pupil per year.
- Reduce the average class size to under 30.
- Radical action on remedial teaching with increased numbers of teachers and real access to remediation for all schools.
- More flexibility in determining staffing needs of schools to ensure that schools are not left understaffed.
- Targeted funding to reduce class sizes at second level.
- Equitable funding for all schools in the secondary sector.
- Increased level of grants for students from low-income families.
- Fairer system of grant allocation.
- Special measures to provide student accommodation in the context of addressing the overall housing crisis.
- Support for Adult Education aimed at the 500,000 adults in the 26 Counties who have basic literacy problems.
- Funding to open the Back to Education programme to people in employment. Only those unemployed for six months or more can avail of the programme, thus excluding most adults with basic literacy problems.
- Free access to second-level education to be recognised as a right for all.
Supporting People with Disabilities
The rights and needs of people with disabilities must be a Government priority.
Sinn Fein proposes:
- An Independent Living Fund for people with disabilities with a start-up of at least £10.8 million in 2001. Direct payments to people with disabilities and their Personal Assistants. Increased and secured financial support for those providing services, including day resource centres and personal assistance services, to people with disabilities. End of dependence on CE schemes for such work.
- Introduction of Cost of Disability Living Allowance as recommended by the Commission for the Status of People with Disabilities.
- Increase in Mobility Allowance to £45 per week.
- Financial support for full-time carers through the increase of Carer's Allowance and an end to the means test.
- Funding to continue progress in cutting waiting lists for services for people with mental handicap/intellectual disabilities. Special funding in Budget 2001 to speed up the transfer of all remaining persons with mental handicap/intellectual disabilities in psychiatric institutions.
Making Childcare a Real Priority
What value economic development if the children of the nation are not properly cared for? We must ensure that children receive the best care at all times. That includes care by parents in the home, care by other family members, paid care by childcare workers in the home, early childhood education, créches and other facilities provided by the community or voluntary sector or by private concerns.
In addition to the resources earmarked in the National Development Plan, a further commitment is needed which will really show the determination of the Government to prioritise this issue.
Therefore Sinn Fein proposes that:
- The full amount of revenue accruing from payment of previously unpaid DIRT by financial institutions be devoted to the provision of childcare.
We need 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.
The Budget must include immediate action to make childcare affordable. Sinn Fein proposes:
- Substantial increase in Child Benefit. The commitment made in the PPF should be implemented in full in Budget 2002. This would involve an increase of £33.50 per month for the first and second child and an increase of £44 for the third and subsequent children. This would bring the payment for the first and second child up to £76 per month (about £17.50 per week) and it would bring the payment for the third and subsequent children up to £100 per month (or about £23 per week).
- Rationalise all Child Dependent Allowances (CDAs) to a single rate of £17 per dependent child. There are currently three rates of CDAs (£13.20, £15 and £17); most are payable at the lowest rate, though recipients of One-Parent Family Payment and Invalidity Pension get the £15 rate and recipients in receipt of Survivor's Pension and Deserted Wife's Benefit get the highest rate.
Bhí sé geallta ag an rialtas Bille Teanga a chur os comhair an Oireachtais i 1999, i 2000 agus i 2001. Anois ní bheidh sé ann roimh 2002. 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:-
- Buiséad Foras na Gaeilge a dhúbailt.
- Céadatán níos mó do na heagrais deonacha chun chur lena ngairmiúlachas agus lena gcuid scéimeanna chun an Ghaeilge a chur chun cinn.
The Irish Language
The Government promised an Irish Language Bill in 1999, 2000 and 2001 but now we are told it will not be ready before early 2002. This delay 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:
- Doubling of funding for Foras na Gaeilge.
- Increased percentage of funding from Foras na Gaeilge for the Irish-language organisations to increase their professionalism and assist their efforts to promote Irish.
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