'The budget is a massacre of those in the negative equity generation'

Below, the full text of Stephen Donnelly's Dáil statement on Budget 2013, delivered yesterday (5 December). 

The entire approach to this budget is flawed. The Government is taking €3.5 billion from the Irish people and handing it to Anglo Irish Bank as payment on a debt we never owed. The Government is taking €3.5 billion from the Irish people but the deficit will fall by less than €1 billion. Why is that? It is because of the payment of almost €2 billion of interest to Anglo Irish Bank on a debt we never owed. The Government will allow AIB to retain a €1.1 billion top-up to its pension fund. The Minister for Finance, Deputy Noonan, stated that tax compliance is a core principle of our democracy. He lectures the people on their obligation to pay a property tax, the entire benefit of which he will hand to Anglo Irish Bank.

The Government brought forward virtually no meaningful investment measures. Instead, it announces a cut to funding in our third level sector. This is madness. What is the result? Yes, GDP is rising very slightly but it is rising because of exports by our multinationals. The profits all get expatriated. GNP, the measure of Irish companies, will rise by less than 1%. The Government makes much play of the fall in unemployment but it is due to emigration. The number of people at work has fallen by 35,000 in the past year. The austerity only approach, which feeds tens of billions of euro to two dead casinos, is doomed to failure. This budget is the latest chapter in that sad approach.

The Government spoke earlier about fairness. Let us examine the numbers. Between 2012 and 2013, if one earns €20,000, income tax will increase by 1.3%. If one earns €120,000, it will increase by 0.2%. There is an increase in tax on a person earning €20,000, which is 32 times bigger than the increase in tax for someone earning €120,000. The property tax, the change to PRSI, cuts to child benefit and the increases to duty, motor tax and carbon tax are regressive. I do not know how the Government can use the word fairness with a straight face. The budget is a massacre of those in the negative equity generation. The Government is cutting their child benefit, increasing their income tax and charging them for homes they despise, which are debt around their necks. If they are renting out their house and renting another house to live in because they cannot afford to buy a bigger house to live in with their children, the Government will charge 7.5% PRSI on the rental income from the house they do not want, which is in negative equity and on which they are now being charged a property tax. It is a joke.

The austerity only approach does not work, a point on which history is unambiguous. Further payments to the banks cannot be justified when this is being asked of the people. The Government makes great play of being 85% of the way there. This is rubbish. One payment of €31 billion was made to Anglo Irish Bank, which is a nominal accounting measure. The deficit peaked in 2009 at €22 billion. Next year, the deficit will be €13 billion so we are less than halfway through correcting the deficit. The Minister for Public Expenditure and Reform, Deputy Howlin, stated future generations will be proud of the work done today. They will not. They will ask why their country was decimated in the name of anonymous bondholders and why their schools and colleges were stripped of teachers and investment. They will ask why they are still paying for the debts of Anglo Irish Bank and Irish Nationwide. No Government should ask its people what is being asked by the Government.

I accept the deficit must be closed if the Government stops the €5 billion payment to Anglo Irish Bank and Irish Nationwide and takes back the €1.1 billion pension top-up from AIB and directs it towards education, job stimulus, investment and protecting vulnerable groups and reversing the most egregious cuts and reducing inequality. Then we can start to a genuine recovery in the economy. Vote after vote in the House tonight will push us further down the failed path failed of austerity.