Recovery for who?

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Recovery for who?


Election 2016

We say:

  • Enforce the 12.5% corporation tax rate, with a view to raising it towards the European average
  • Public investment before tax cuts
  • An end to regressive taxes like water charges – progressive taxation to ensure the wealthy and corporations pay their fair share
  • Long-term, sustainable economic policies with fairness and equality as their central goal

Putting people before profit

This election season, we’re going to hear a lot about economic ‘recovery’, and an awful lot of boasts from Fine Gael and Labour about their role in it. We’ll be told how happy we should be about this recovery, and how the country has ‘turned a corner’. But it’s very hard to be happy about a recovery that’s leaving so many people behind. It’s a recovery that’s benefiting only certain sections of society, and for the rest, any small increase in wages or employment will be more than offset by the rising cost of living, and the consequences of the decimation in public services that’s taken place over the past five years.

We have to trust our own senses – if we do, it’s obvious that things in Ireland are not as rosy as Fine Gael and Labour desperately want us to believe, and that there is an urgent need for change.

While property, water, VAT, and other regressive taxes are levied on pensioners and the unemployed, multinational corporations get away with an effective tax rate of 2%. If corporations paid the paltry 12.5% they are levied – as a first step to increasing it to the EU average – it would yield billions to invest in necessary infrastructure.

Such infrastructural investment would put people back to work in decent secure jobs, putting life back into small businesses in towns and communities.

To deliver a fairer Ireland and begin to tackle the issues affecting so many people, we need a truly progressive tax system – one where corporations and the very wealthy pay their fair share.

Fine Gael and Labour came to power shouting about reform, about a democratic revolution, about how they’d be a new broom that would do everything differently to Fianna Fáil. But at the end of five years, it’s clear that nothing has changed. Economic policy is as short-termist as it ever was, and essentially boils down to courting multinationals by facilitating mass tax avoidance.

Recovery for who?

When you have a youth unemployment rate of 20%, when half the population earns less than €28,500 a year, when nearly 40% of tax cases – that’s individuals or jointly assessed married couples – have incomes of €20,000 or less per year, when garda stations are closing, hospitals are overwhelmed, classrooms overcrowded, hundreds of adults and children are living in hostels and hotels, when more than 80,000 people are employed on so-called job ‘activation’ schemes, when our natural resources are given away for nothing to giant multinationals, the need for change is very obvious. Just like the so-called ‘boom’ didn’t benefit everyone across the board, so any recovery won’t either if it’s overseen by another right-wing government.

Indigenous industry and long-term economic policies

A just, equitable, sustainable society can’t be built on the tax strategies of multinationals. We need to focus on building up indigenous industry, and on public investment to make this happen. We need to look at new models of company organisation, for example co-operatives and other structures in which employees and management have an equal say. As it stands, Ireland is fully exposed to any global shocks to the flow of capital around the world; it’s also fully exposed if there are any major changes in, for example, American tax policy. We have no control over our own economy so long as we don’t have a strong and sustainable economy of our own. If we want to start to try and build a more equal society, we have to work on ways to steer economic policy away from the whims of multinational capital and away from endless speculation.  

An unequal society

And this is something that we need to do sooner rather than later. Ireland is a deeply unequal society. Wealth is hugely concentrated in the hands of a tiny minority; half of all wealth in Ireland is held by the top 10% of households, while the bottom 50% has only 5%. The very very richest actually saw their wealth increase over the past few years – Ireland’s richest 300 people increased their wealth by a record €13.65bn in just one year between 2014 and 2015.

We have to reverse this trend. Without people power, and sustained, grassroots action, though, that won’t happen. Successive governments in Ireland have shown a preference for allowing a small minority to accrue enormous wealth, and have shown little inclination for implementing policies that would distribute wealth more evenly across society. After 2008, and after the bank bailout, the weight of what they euphemistically call ‘adjustment’ was overwhelmingly placed on the shoulders of those least able to bear it.

The rich get richer

It’s not an accident that the rich have gotten richer over the past number of years – it’s a natural outgrowth of government policy over decades. While average incomes in Ireland have doubled since the 1970s, the incomes of the top 10% have tripled, while the very richest 1% have seen their incomes increase five-fold.

We’re told that we should vote for stability, that this election will be a choice between what they call stability, and what they call chaos. Decades of wealth transfer to the very wealthiest is not stability. Public investment that’s near the very bottom of the EU league table, matched in its stinginess only by Latvia and Lithuania, is not stability. 250,000 emigrants between 2010 and 2015 is not stability. A nation of low-paid workers who can’t afford to put a roof over their heads is not stability.

We need to do things differently: we need economic policies that are long-term, that have fairness and equality as their central goal, and that will offer to all citizens the chance to live a decent, dignified life.

We can only achieve that if we prioritise the interests of the many above the interests of the few.