4 Year Recovery Plan, Eh?
Here's my initial reaction to the Government’s 4 Year recovery plan, published yesterday:
So much money is to be taken away from the incomes and services of vulnerable people that we can conclude that our worst fears have been realized and that it appears that the most vulnerable people in our society (the unemployed, the sick and the disabled) will pay the price for social and economic recovery.
If implemented in full this 4 year plan will impose the greatest part of the €15Bn adjustment on the incomes and services of people dependent on statutory benefits and on the working poor.
The “adjustment” is to consist of expenditure cuts of €10Bn and tax increases of €5Bn. We argued instead that Government should have put the emphasis of the adjustment on increasing taxation rather that on reducing expenditure.
The welfare budget is to be slashed by €3Bn over 4 years and if that reduction is spread across all welfare recipients it will mean a drop of €40 a week for a single person (from €196 a week to €156) between 2011 and 2014. This equals a cut of 31% in the income of one of Ireland’s most vulnerable groups of people.
The health budget is to be cut by €1.4Bn between now and 2014 and is to be slashed by €746 million in 2011 alone - with €480m of that being cut from budget lines for charities and other groups that provide services for vulnerable people - and with a further €490m to be cut between 2012 and 2014. That’s a total of €970m from a 2009 expenditure of about €3.9Bn and equates to a 25% cut in budgets for health and social services by 2014
Our social infrastructure - and the charities and community groups that provide our community based social services - will be devastated by these cutbacks.
And all of this before we consider the effect of the €1 cut to the minimum wage (a 12%cut) and the entry point for a single person to the PAYE system falling from €18,300 in 2010 to €15,300 by 2014. The working poor will lose an average of €40 a week from pay-packets while paying up to €12 a week extra in tax.
At the same time, there is to be no increase in corporation tax and billions are to be borrowed by the state to pay back the people who lent recklessly to the banks during the property boom. All of this means that those that benefited most from the boom – the corporate sector and the senior bondholders – will make no contribution whatsoever to the cost of this adjustment.
Although the Government notes in the plan that they set “the vulnerable must be protected as far as possible” as a guiding principle in this 4 year plan, The Wheel believes that this unjust 4 year plan has only paid lip service to that principle.
The Wheel will be making representations to Government on this plan and I’d ask you to revert with your reaction and with what you think will be the likely effects on your organization and the people you serve: the more reaction we have from our members, the better the case that we can make.
I will be back in touch again as we approach budget day and as the reaction to this unjust plan unfolds.
Once again, I'd like to invite you to The Wheel's Policy Forum, to be held 9.15am to 12.30 on November 30th at the Carmelite Centre, Aungier Street, Dublin 2. Please register here and come along and help shape The Wheel's response to this plan and to Budget 2011.