The Government has real choices to make in Budget 2014. Austerity is not working. The Government needs to take a New Course for Jobs, Growth, Hope and Recovery.
SIPTU is mounting a national pre-budget political campaign to convince politicians that a different fiscal adjustment is possible.
Activists and Organisers are meeting with politicians in their constituencies and setting out the trade union movement’s strategy for a better fairer budget. You can read the alternative budget strategy here (hyperlink to ICTU document).
Through the local District Committee structure we are reporting back to members on the outcome of our on-going engagement with politicians
What are the key differences between the Government’s published strategy and the trade union alternative strategy
1. The size of the Budget 2014 adjustment
The Government plans to take €3.1bn out of the Irish economy in budgetary measures in 2014. We are calling for a budget which takes out just over €2bn in 2014.
2. What is the likely impact of that adjustment?
Based on estimates produced by Nevin Economic Research Institute, the Government’s 2014 budget will have a deflationary impact on the economy.
They estimate that a €3.1bn budget adjustment (worth almost 2% of the value of goods and services produced in the economy) will reduce GDP by 1.4% by negatively hitting the domestic economy i.e reducing household and business demand. It will also lead to the loss of 14,000 jobs.
In contrast, ICTU proposes a much smaller budget adjustment of just over €2bn which will protect existing jobs and generate new ones. The ICTU proposal will boost and not deflate the domestic economy. It will reduce the deficit in line with the EU’s targets.
Compared to the Government’s approach, the ICTU budget would boost GDP by 2.3% and would generate an additional 41,000 jobs.
3. What is the proposed composition of the Budget?
The Government’s current plan is that Budget 2014 will be made up of €1.9bn in spending cuts, €1.1bn in tax measures and a €100m/€0.1bn cut to the capital expenditure budget.
ICTU is saying that aside from the €350m/€400m savings from Haddington Road and €600m in tax measures already announced in last year’s budget (e.g. Property Tax and Pension changes) that will be carried over to 2014, some €1.025bn can be raised in new tax increases (taxing high income earners, increases to capital gains and capital acquisition tax and the introduction of a wealth tax). Furthermore, ICTU is calling for an additional €1.5bn investment programme to be rolled out in 2014 which would have the potential to generate 25,000 jobs in the first year.
4. What is at stake?
The biggest cut is likely to come from the health budget with additional cuts of €440m in social welfare, €135m in justice and policing and €56m in public transport.
5. What is our alternative?
This is the first year where the Government actually has some scope to exceed the deficit targets due to the savings arising from the Promissory Note deal undertaken earlier this year. At a time when possible signs of a recovery in the Irish economy are very fragile, we only need to meet the deficit targets, not to exceed them. The Government’s budget plan aims to reduce the deficit to far below the 3% deficit target to 2.2%. ICTU proposes to use the €1bn in savings in 2014 and allocate them towards supporting job friendly policies and maintaining vital public services, many of which have already been badly hit.
Dublin North Central
The Nevin Economic Research Institute has produced a series of short videos on Budget 2014. Watch them here.
10 x NERI Budget 2014 videos featuring Tom Healy.
Meeting of the Joint Committee on Finance, Public Expenditure and Reform 12th September, 2013 – Budget 2014. Tom Healy, Director NERI and Peter Rigney, ICTU presenting ICTU pre-budget priorities, starts at 03:55 - http://www.oireachtas.ie/viewdoc.asp?DocID=24317&&CatID=127
SIPTU Towards A New Course Video - https://www.youtube.com/watch?v=x4WDjiHoDyY
Nevin Institute homepage - http://www.nerinstitute.net/
Nevin Institute research on income taxes and income tax options - http://www.nerinstitute.net/download/pdf/income_taxes_and_income_tax_options_neri_wp_sep_2013.pdf
SIPTU Policy Research Unit - http://www.siptu.ie/services/policyresearchunit/
Liberty articles on the campaign, pg. 1,2 4 September issue - http://www.siptu.ie/media/media_17578_en.pdfhttp://www.dailwatch.ie/
 NERI (2013). Quarterly Economic Outlook, Summer 2013.