The Wheel Reacts to Budget 2011

The Wheel

In September this year The Wheel presented Government with a Five-Point Plan to Protect Vulnerable People in Budget 2011. It is now clear that Government has failed to protect vulnerable people in Budget 2011 and poor, sick, disabled and low paid people will pay a totally disproportionate price to deliver economic recovery– but not social recovery - for our country.

The Wheel asked Government that Budget 2011 would ensure that  

  • People who can afford it contribute more to the cost of recovery.
  • We take an integrated approach to achieving social and economic recovery.
  • Our public services - and the people who depend on them - must not be sacrificed to fund a superficial recovery.

Far from taking an integrated approach to achieving social and economic recovery, Budget 2011 will create serious difficulties for those dependent on social welfare and for those working on low pay. Poor people will be hit many times by this budget, with a cut in the minimum wage rate, cuts in social welfare rates for unemployed people, disabled people and carers, a reduction in child benefit, increased tax and universal-social-charges and reductions in rent supports.  

The Department of Community, Rural and Gaeltacht Affairs appears to have been singled out for a punishing 16% budget cut.  These cuts will impact completely disproportionately on Ireland’s most vulnerable communities.  



Meanwhile, people on higher incomes are making a disproportionately small contribution towards the cost of recovery in Budget 2011.  The impact on people on social welfare and low pay is much greater than on higher earners and Budget 2011 will inevitably lead to increased poverty rates. Statistics released last week by the Central Statistics Office ( CSO) for 2009 show that levels of consistent poverty rose from 4.2% in 2008 to 5.5% while the numbers unable to afford basic requirements went up by 25%.  This is even before the impact of cuts in Budget 2011 are taken into account.  It is indeed a source of shame that Ireland’s poor and vulnerable people have been sacrificed to fund a superficial “economic” recovery in Budget 2011

In our 5 Point Plan to Protect Vulnerable People The Wheel asked Government to increase the tax take while keeping Ireland a low tax country.  We pointed out that targeting Ireland’s lowest earners was not the best or fairest way to widen the tax base or increase the tax-take. While Government has increased the tax take in Budget 2011, by bringing over 100,000 lower paid workers into the tax net, Ireland’s total tax take is still less than 35% of GDP which means Ireland is still an ultra-low tax country by European standards.  People who can afford to have not been asked to contribute their fair share to the cost of recovery in Budget 2011.

Budget 2011 threatens survival of charities working with Ireland’s poorest.

The Wheel asked Government to secure better value for money in the delivery of our public services and pointed out that while targeted expenditure cuts were undoubtedly required in Budget 2011, vulnerable people should have been protected.  We noted that a good starting point would have been the elimination of the waste identified in the Comptroller and Auditor General’s reports.  Budget 2011 does not set any financial targets for achieving better value for the delivery of our public services – financial savings that COULD have reduced the impact of budget 2011 on people dependent on benefits and on the working poor.

The Wheel asked Government to reform the public sector by implementing the recommendations contained in the report of the OECD – again Budget 2011 contains no vision as to how our public services can be restructured around meeting the needs of vulnerable people.

Finally, The Wheel argued that Government should be focusing expenditure on the common good to provide the public services required by vulnerable people.  Instead, Government has reduced key budget lines for supporting the thousands of charities and voluntary organisations that provide essential services for vulnerable people.  The Department of Community, Rural and Gaeltacht Affairs appears to have been singled out for a punishing 16% budget cut.  These cuts will impact completely disproportionately on Ireland’s most vulnerable communities.   

Key budget lines for Government support for charities and community groups in other departments such as the HSE; Justice and Law Reform; Environment, Heritage and Local Government; and Education and Skills also appear to have been severely cut.  As a result, The Wheel is seriously concerned about the ability of Ireland’s charities to withstand the negative impact of Budget 2011 and to continue to provide essential services and supports for Irelands most vulnerable people.

Meanwhile senior bondholders and beneficiaries of Ireland’s 12% corporation tax rate are not making a contribution to achieving a fair and just social and economic recovery.

Visit The Wheel's Budget 2011 section.