Ireland Budget 2014: More Austerity

Michael Noonan’s Budget 2014 will take a further €2.5bn out of the economy;  in other words a figure of around €600 for every man, woman and child in the state. It is evident also that as anticipated the losers are the old, the sick and the young unemployed.

The income threshold for Medical cards for the over 70’s has been cut, as well as a €9.50 cut in telephone allowance. Jobseekers under 25 have had their benefits cut and the waiting period for illness benefits has been doubled from three days to six. Disabled people will have their benefits means tested and will also lose out on the telephone allowance.

Sure, limited GP only health care will be guaranteed to the under 5’s, but after five years of austerity and economic crisis that is a mere drop in the ocean. The impact of a 10% cut in the public sector  since 2008 and an ever higher cut in public sector pay has been dramatic, cutting demand and increasing the numbers on the live register.

This budget was heralded as the last budget under the Troika programme, yet there is little evidence of any relief for working people. In truth Troika or no Troika the Irish economy is still in a weak position. The prospects for export growth are tied in to the prospects for the Eurozone and the world economy.  The European Central Bank recently increased its predictions for the Eurozone to predict a 0.4% fall in production this year.

The economy in the state is hugely reliant on exports, which means that the general conditions on a world scale can heavily influence the Irish economy. While Chinese output has risen marginally over the last quarter, the US economy is facing further uncertainty in the next period arising from the recent Government funding crisis. There is therefore little prospect of any significant upturn in the next period. The live register remains at historically high levels and emigration is still draining youth and vigour from the state.

Richard Bruton has claimed that the Budget will deliver some 48,000 new jobs; however these claims have already been criticized for the assumption that the coalitions strategy will have a knock on effect creating a further 20,000 jobs. Here is what he said:

"Enterprise Ireland and IDA are targeting the creation of a total of 24,000 gross new jobs in supported companies during 2014 as a result of financial supports allocated under today’s Budget. Based on a conservative calculation of standard multiplier effects, this will result in the creation of more than 20,000 additional jobs elsewhere in the economy through supply companies and support services. The CEBs/LEOs are expected to support the creation of a further 4,500 jobs in 2014."

The problem for Bruton however is that Enterprise Ireland explained in 2012 that the net impact of such measures is closer to 25%, as Finfacts explain:

“Bruton says nothing about the job losses: This is what Enterprise Ireland said last July in respect of 2012  in its annual report - - "The report also shows that client companies created 12,861 new jobs in 2012 resulting in a net increase in full-time employment of 3,338." So the net jobs added was at a quarter of the gross rate.” Finfacts 15/10/2013

The problems of the Irish economy reflect an organic impasse in the Capitalist system on a world scale. The Irish bourgeoisie and their masters in Europe, New York and London, have no doubt that the working class have to pay the cost of the crisis. The task of the Irish Marxists and of all active workers and youth in the state must be to rearm the workers movement with a fighting socialist programme, capable of galvanising the opposition, but more importantly to provide an alternative to the anarchy of Capitalism.