Prevailing government mindset hits poor hardest

The combination of the billions being handed to the banks, allied to the mounting unemployment plus cuts in social welfare and public service salaries probably will represent the largest transfer of wealth and income from society to a financial and corporate elite that has occurred here in centuries, certainly in generations, and it will change the character of this society for generations to come.

It is not that there is a conscious conspiracy within the halls of government to screw the poor and enrich the rich. Rather the prevailing mindset in the Government and throughout the political establishment, aided and abetted by the mindset of the media establishment, notably in RTÉ, ordains this be done as “the only option”. After all “the country is broke”, we simply cannot afford the “lavish” welfare payments we piled up during the good years. And, of course, we have to protect the banking system.

This Government has been hugely responsible for the economic collapse that has caused the loss of hundreds of thousands of jobs, through its indifference to the emerging banking crisis and its wanton destruction of the tax base by cutting taxes to the spectacular benefit of the rich (others of course benefited too and, incidentally, Fine Gael and Labour egged them on). And having blighted the lives of the hundreds of thousands now unemployed, it is now going to immiserate them further by reducing welfare rates.

Meanwhile, the Government refuses to acknowledge that the richest here still pay only a small fraction of their income in income tax and that seeking 43 per cent of their income from those earning over €100,000 would obviate the need for any welfare reductions.

One of the “justifications” for cutting welfare rates will be comparison with similar rates in the UK. In its facilitatory submission to Colm McCarthy’s committee on cutting public expenditure, the Department of Social Welfare (this document is now on the Department of Finance website, having been disclosed via a Freedom of Information application) acknowledges that the Irish contributory pension is €230.30 per week, while the UK basic contributory pension is €105.06, but it immediately follows this up by stating: “This is a somewhat simplistic comparison in that the UK system, in reality, pays a higher level of pension”. It points out: “The UK spent 26.8 per cent of its GDP on social protection in 2005 . . . while Ireland spent 18.2 per cent . . . The EU average was 27.2 per cent”.

But will any of the defenders of welfare cuts make this acknowledgment? Not likely.

One of the cruellest measures on the way is the abolition of the Community Development Programme (CDP) in 182 deprived areas around the country. The programmes are being run mainly by women in the areas concerned. They provide information, advice and support to unemployed people, lone parents, Travellers, youths, young families, the elderly; childcare; and adult education courses and training opportunities.

Pat Carey, then minister of state for poverty and related issues, said on January 4th last: “I am delighted to announce substantial funding to Community Development Projects and Organisations. The Government has once again signalled its commitment to the sector, which reflects the work done by project organisations in support of those in our communities who are less well off or marginalised in whatever way.” The Government is now about to signal its utter indifference to the sector but that will be lamely disguised by a supposed amalgamation with an entirely different body.

There will be increased health charges, aimed at the low paid and those dependent on welfare. All as part of a capitulation to wealth and corporate power.

The most spectacular capitulation of course has been to the financial system and to those who are part of it. The capitulation has involved everyone in this society giving a guarantee to all the depositors, bondholders, and lenders to the banks to the tune of €450 billion (according to the new governor of the Central Bank, Patrick Honohan, no other country gave a guarantee to such an extent); we have given €12 billion in bailout, another €10 billion is on the way and relief of their bad assets to the tune of €54 billion.

This day week, Brian Lenihan will rise in the Dáil to announce these cuts and will be hailed for his courage in “making the hard decisions”, “in the national interest”.

And ranked to his left will be his co-conspirator Cabinet Ministers. And they will all say how difficult it is for them to devastate the poor and implicitly claim credit for their courage!