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Sunday, October 31, 2010

A roadmap to recovery

Tomorrow Sinn Féin will launch its pre-budget submission. The proposals are fully costed by the Department of Finance and leading economists. It is a roadmap to recovery. We are standing against the cosy consensus of the Government and the main opposition parties and their ‘consensus for cuts’. There is another way and a better way.

Our plan will reduce the deficit by €4.671 billion and provide for a financial stimulus of €595 million in 2011 and a three and a half year economic stimulus package of €7.595 billion. The plan exposes the Government myth that cutting social welfare, introducing water charges, bringing the low paid into the tax net, doubling college registration fees and cutting child benefit are all necessary. They are not. They are the choices of a bad government and a poor opposition.

Revenue raising

The Irish economy is like a sinking ship. We all need to work together to get the ship to port. What the Government and the other parties want to do is to throw the weak, vulnerable, low paid and those out of work overboard. Bankers, bondholders, speculators and the wealthy will be safely lowered into the lifeboats. They want to take more from those who don’t have it while protecting those who can afford to pay more.

We are proposing a third rate of tax on incomes in excess of three times the average industrial wage (€100,000), standardising all discretionary tax reliefs, introduce an income-linked wealth tax, increase capital gains tax from 25% to 40%, increase Capital Acquisitions Tax to 35%, increase DIRT tax, reduce the earnings cap for pension contributions for high earners and increase tax on multiple housing units.

Abolish exemptions

There are far too many tax exemptions available to the wealthy in this state. These are regressive in the best of times. They are immoral at a time of deep recession. We are proposing the abolition of mortgage interest relief for landlords, abolishing the PRSI ceiling, abolishing PRSI exemption for share options and abolishing a raft of property tax reliefs. The state cannot continue to subsidise the wealthy as the less well off see their income cut to the bone.

Public Spending Savings

This state is facing bankruptcy and we need radical proposals. Taxing the wealthy is a radical proposal and is right. Cutting child benefit is not radical and it is wrong. Senior civil servants and Government Ministers, TD’s and Senators are overpaid. The Government is considering taking €5 a week from someone on social welfare who survives on €196 a week, while paying the Director of the HSE over €300,000 a year. This is not fair or sustainable.

We are proposing that Ministerial salaries be capped at €100,000, TD’s at €75,000 and Senators at €60,000. We seek to cap the maximum salary of public servants and employees in semi-state bodies at four times the entry level rate (€100,000 per annum). We also propose the introduction of a proper vouched expenses system for all public representatives and senior civil servants and reducing the states professional fees by 25%.

Stimulus

Attempts to address the deficit without providing an economic stimulus is economically illiterate. Government policy to date has been to cut and it has failed. Every time they cut they deflate the economy and the tax take drops. Doing more of the same is not going to work. They are joined in this thinking by Fine Gael and Labour. These are the parties who said a vote for Lisbon was a vote for jobs, investment and prosperity. They all believe that to grow a little, you must cut a lot. We believe that to grow at all, you must invest. Without a stimulus the economy will sink faster and deeper.

We are proposing both a financial and economic stimulus plan. We will use €595 million saved in 2011 to provide a financial stimulus to the less well off. This will include making tax credits refundable to the low paid, return the additional social welfare payment to those out of work, remove all those under the tax bracket from the Government levy and also remove the 50 cent levy on medical card prescriptions.

We would also transfer €7 billion from the National Pension Reserve Fund for a state-wide investment programme. Last year the NPRF invested in a champagne house in France. Why not invest in new schools the new geriatric unit at St Patrick’s Hospital and Waterford Regional Airport instead? Let’s invest in the Irish economy.

An economic stimulus is good as it will create jobs, provide good value for money and position the economy to recover. At the moment the Government is putting our money in the black hole that is Anglo. They are investing in banks. We will invest in the state and people. Let nobody say there is no alternative to the consensus for cuts. We in Sinn Féin are providing it

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