ULA Pre Budget Statement

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Economy

Clare Daly TD said: More and more people in this country are struggling and wondering how they are going to pay their bills and put food on the table. Imposing a property tax on people who can already barely make ends meet will have a disastrous effect. Cutting child benefit will put enormous pressure on families. If people can’t spend how is the economy going to recover. What we need is an end to this austerity and get people back to work”


          
United Left Alliance pre-budget statement calls for debt repudiation and higher taxes on wealth and profits to fund jobs programmes and reversal of cuts

 

          ULA proposes abolition of USC for those earning less than 40,000, end to home-taxes and reversal of cuts in health, education and social welfare

 

 

At a press conference today, the ULA proposed a socialist alternative to the budget proposals of the government and the other parties in the Dáil. The ULA pre-budget statement says that those who are responsible for the crisis should pay for it, not those who are the social and economic victims – the ordinary working people of Ireland.

 

The ULA  proposes to take the burden of the crisis off working people, improve their lives and revive the Irish economy. This can only be done by taking the decision-making of the banks and finance houses out of the hands of management whose only goal is profit; and embarking on a major public investment program. If the current investment rate of 10% of GDP (EU average is 18.5%) continues, Ireland will become an economic backwater with impoverishment for generations and run down public services. Only a reversal of current policies can stop that.

 

The ULA proposes to repudiate all debt deriving from the financial crash that started in 2008 and raise additional revenue from increases of income tax on the richest in society; to introduce a wealth tax and a financial transaction tax; and to impose a minimum effective rate of 12.5% corporation tax, with a nominal rate of 15%.

 

The following are some of the measures being proposed. The full statement is attached.

 

Deficit, expenditure and revenue-raising measures:

 

The primary deficit for 2013, without the €9.1 billion debt-interest payment and without the government’s proposed cuts and tax increases would be €6 billion. Interest payments on the remaining debt after repudiation: €1.6 billion. Reversal of cuts: €3 billion.

 

Total deficit to be closed: €10.6 billion

 

Revenue generating measures:

Corporation Tax: €5 billion

Wealth Tax: €2.8 billion

Financial Transactions Tax: €0.5 billion

Income Tax: €2.5 billion

 

Total: €10.8 billion

 

Public Investment Program: net cost €15 billion over three years.

Redirect money held by Irish banks to pay bondholders (€17.4 billion available for 2013 alone) to a Jobs Fund. Other sources: a Jobs Bond, NPRF investment, pension funds and Credit Unions.

 

 

Don’t pay the debt – It’s not ours!

 

The ULA proposes to write down the national debt to pre-crash levels and halt all debt-interest payments incurred as a consequence of the crash.

 

Writing down the Irish debt to the pre-crash figure of €47.4 billion would reduce debt-interest to  approximately €1.6 billion next year – at an interest rate of about 4%.[1]

 

Repudiating the debt would also mean cancelling the planned €3 billion in annual payments to Anglo-Irish Bank and any further payment of debts to bondholders in BOI, AIB or other private banks. These amount to  €17.4 billion in 2013, €5.9bn in 2014, €11.6bn in 2015[2]

 

Increase total income tax-take on the wealthiest 5% by €2.5 billion

Through a combination of graduated tax bands for incomes in excess of €100,000 (50%), €150,000 (60%), €200,000 (70%) and the establishment of a sliding scale of new minimum effective tax rates on incomes over €100,000 per year, the ULA proposes to increase the annual tax take from this group by €2.5 billion.

 

Introduce a ‘Millionaires Tax’ to raise €2.8 billion in 2013; set up a wealth and assets register.

Central Bank data for Quarter two of 2012[3] show that there were €446.4 billion worth of net assets, when debts and liabilities are subtracted. A 5% wealth tax on assets in excess of €1 million would raise €2.8 billion in 2013.

 

Introduce a Financial Transaction Tax.

A tax on bond and share trading of 0.1% and on derivatives of 0.01% would raise an estimated €500 million.

 

Impose an effective corporation tax rate of 12.5%, rising to nominal 15%

In 2010 companies registered in Ireland declared pre-tax profits of just under €70 billion but only paid €4.2 billion in tax – an effective rate of below 6.5%. An effective rate of 12.5% would raise €4 billion and an increase to 15% would raise another €1 billion. Total: €5 billion.

 

Take full control of the banks.

Irish banks are among the best capitalised in Europe due to their bail-out. AIB is already 99% state-owned and Bank of Ireland is 15% state owned. We propose full nationalisation with direct public control of the banks and finance institutions, including their mortgage portfolios, without compensation except on the basis of proven need.

 

Write down mortgage debt

Resolve the mortgage crisis through a write-down  to current market value of owner-occupier mortgages given out between 2002-2008. The banks have been given money to cover losses on mortgages. Any shortfall should be covered by non-payment of bondholders. Remove the bank veto in personal insolvency legislation; enshrine in law protection of the family home; no repossessions.

 

Lend to small businesses – differential rates and rent controls

Bring in a progressive system of differential rates based on profitability; end upward only rent reviews; bring in rent controls. Increase credit for small businesses and farmers through

democratic public ownership of the banks.

 

€24 billion public investment to directly create 180,000 jobs – net cost €15 billion

 

The current investment rate of 10% of GDP a year will turn Ireland into an economic backwater, with continued unemployment around 15% and mass emigration. Private investment has dried up – down €32 billion a year since 2007.

 

A €24 billion investment program over three years would put 180,000 directly to work. At wages of €35,000 it would cost €2.7 billion p/a on top of current jobless benefits. Indirectly another 120,000 jobs would be created – a total of 300,000. The net cost to the state after three years would be €15 billion, as a result of the increased tax revenue and higher GDP.[4]

 

Funding would come from the €17.4 billion the banks have for bond payments; from the launch of a Jobs Bond; from social investment by the Credit Union movement; from investment by Irish pension funds; and from the NPRF.

 

A three-year program of state-built housing provision – costing €3 billion per year but self-financing over 10 years.

Provide 100,000 new Council houses over three years using empty housing and new build; transfer all suitable empty housing to local Councils; build Council housing to meet needs and eliminate waiting lists; a new state construction company employing 30,000 to refit / build 33,000 houses per year for three years.

 

End the privatisation of state companies and the give-away of natural resources.

Estimates of the value of Irish oil and gas reserves range from €420 billion to €1500 billion. Current tax on the multinationals which extract it is the lowest in the world. Set up a state gas and oil company to develop reserves. Abolish current licences and re-nationalise all oil and gas reserves.

The government plans to sell off our state enterprises. We say stop all privatisations and renationalise of all privatised industries. Develop the economy and natural resources in an environmentally sustainable manner.

 

Abolish USC and Household Tax, and reverse the cuts. (cost €2.9 billion)

 

  • Abolish the USC for those under €40,000 and reduce it by 50% for those earning between €40,000 and €70,000: cost €2.5 billion.
  • Abolish Household Tax. Cost: €160 million.

 

  • ·         Lift the SNA caps – train & hire 5000 SNA’s & resource teachers
  • ·         Reverse the cuts to disability, mental health and childcare services: €50 million
  • ·         Reverse cuts in fuel allowance: €51 million
  • ·         Re-instate the one million home-help hours: €20 million
  • ·         Reverse the change to the income disregard for lone parents, restore entitlement to one parent family payment to 15years; restore the qualified child increase to those on CE schemes & restore concurrent payments: €20.7 million
  • ·         Reverse the cuts to CE schemes, Back to Education allowance and jobs initiative: €35.9 million
  • ·         Reverse the cuts to rent supplement: €55 million
  • ·         Reverse last two years increase in the current student contribution (registration fee): €33 million
  • ·         Reverse the reductions in 3rd level and postgraduate grants: €15.4 million

 

Total cost of reversing cuts: €2.9 billion

 

In a statement Richard Boyd Barrett TD said:

“The purpose of this pre-budget document is to nail the government lie that there is no alternative to continuously bailing out bankers and speculators and paying for it with endless and crippling austerity.

The simple fact is that government and Troika policies are crushing ordinary citizens, working people, the unemployed and vulnerable sectors of our society and strangling our economy. If the government moves ahead with the home tax and further austerity measures next Wednesday, hundreds of thousands of families will driven into poverty and our economy will be driven even further into a vicious downward spiral.

There is an alternative, if we stop paying out billions to bondholders and interest on unsustainable debts that have been loaded onto the backs of ordinary Irish people. If we repudiate these odious debts and impose higher progressive taxes on the very wealthiest in our society and on super-profitable corporations, we can relieve the burden on low and middle income families, stimulate the economy and finance major job creation programme.

Joan Collins TD said:

“By abolishing the USC for those earning less than €40,000 and abolishing home taxes we can drag hundreds of thousands of families back from the brink of poverty and beath life back into our devastated domestic economy.

The government won’t do this because they are protecting the financial and millionaire elites. If we are going to implement a fair alternative, it will only only be done through a major movement of people power on the streets.

We are appealing to the public, who are the targets of the government’s vicious austerity policies to take to the streets on budget day and join the protests called by the Campaign Against Household and Water Taxes (CAHWT), the Council of Trade Unions and other community groups.”

 

Clare Daly TD said:  More and more people in this country are struggling and wondering how they are going to pay their bills and put food on the table. Imposing a property tax on people who can already barely make ends meet will have a disastrous effect. Cutting child benefit will put enormous pressure on families. If people can’t spend how is the economy going to recover. What we need is an end to this austerity and get people back to work”

 

Commenting on the ULA’s pre budget statement Socialist Party/United Left Alliance TD for Dublin West Joe Higgins said:

 

“This statement for me is not about how I think the capitalist system should be run. The system itself is crisis and is failure from the point of view of working class people, low and middle income as well as the unemployed, pensioners and students. What the statement highlights is that economic activity as it is organised under this system continues to make a small minority obscenely wealthy and that if the economy was organised in a different manner the basis would be there to overturn the austerity and meet the needs of people. None of this, not the cancellation of the debt or the taxing of wealth, will be achieved by reasoning with the political establishment or the troika. Instead it has to be struggled for and if such a struggle takes place the resistance that would come from the rich to having their privileges challenged would make clearer to ordinary people the need for a fundamentally different type of society. For me that is a democratic socialist alternative to capitalist crisis.”

ENDS

ULA Budget [PDF download]