Joe Higgins (Dublin West, Socialist Party)

I propose to share time with Deputy Finian McGrath. The thrust of this budget, a further instalment of savage austerity by the Fine Gael-Labour Party Government, must be seen in the context of the global crisis that erupted in 2007 on the collapse of the mountain of toxic debt built up in the financial systems of the US and Europe following decades of deregulation and neo-liberal capitalist policies that permitted an orgy of speculation by the world's biggest banks, marauding hedge funds and obscene speculation. The budget must also be seen in the context of the ignominious collapse in Ireland of the speculationfest in the form of the manipulation of the property market in this State, which drove the price of building land and homes to stratospheric levels, reaping obscene profits for speculators in the form of Irish banks, property developers and major builders. This was underwritten by massive loans from European banks, all at a huge cost to a generation of young working people forced to buy homes at ruinous prices and saddled with ruinous mortgages, whose lives were decimated by the legalised gangsterism that pervaded the system.

This disastrous speculation, which dislocated the entire economy, was underwritten not just by the policies of Fianna Fáil and the Progressive Democrats but acquiesced in by Fine Gael and never seriously or radically challenged by the Labour Party despite some verbal objections. What we are dealing with today is not just the consequences of the inevitable collapse of this national pyramid scheme of speculation but, more specifically, the policy response to it by, first, the Fianna Fáil-Green Party Government and now the Fine Gael-Labour Party Government. That policy has plunged our society into unprecedented crisis with disastrous consequences for our people. It was a criminal policy decision that tens of billions of euro of debt run up by private financial corporations, both Irish and European, should be placed on the shoulders of the Irish people as a whole. The Government that took private losses by private speculators for private super profit and saddled the present and future generations of Irish people with this was guilty of heinous treachery. However, a new Government calculatedly taking this policy in its totality is guilty of equal treachery, equal if not greater because the trenchant rejection of the policy registered by the Irish people in the rout of the previous Government in the general election on 25 February could have been and should have marked a cosmic change in policy.

Instead we have a Fine Gael-Labour Party Government, coming into power promising real change but slavishly following the previous Government's policy. That policy has been dictated by the IMF, the EU and the ECB not to bail out the Irish people but to salvage German, French, British banks and those of other countries from their disastrous and frenzied embrace of Irish bankers and speculators in the Irish property market bubble. It is criminal that an Irish Government would ever slavishly agree to make a vassal State of the Republic of Ireland and its people, to squeeze tribute from our people to save the capitalist banks of Europe and in doing so destroy the lives of hundreds of thousands of our people now plunged into unemployment, financial hardship and social dislocation.

In this budget and the past four years the austerity policy means €25 billion has been reefed out of the Irish economy in pursuit of a policy of cringing acceptance of the diktats of the financial markets. Can this Government not see that, not only is this immoral and unjust in the extreme, it is decimating the domestic economy? As we are tired of pointing out, if we savage the ability of the majority of our people to purchase goods and utilise services, then tens of thousands of workers depending on this demand for their jobs will be thrown on the scrapheap of unemployment and, tragically, that is what is happening. All the key indicators in the domestic economy show the abject failure of austerity. Private investment has collapsed, VAT receipts are more than €400 million behind and unemployment has risen by thousands since this Government entered office. Much is made of the growth in exports. Every job in the export sector is vital and we defend it but the type of investment and the capital intensive nature of the investment that goes into exports means that it is not where the hundreds of thousands of jobs we need will be created in the next period of years.

On the other hand, taking €670 million from the pockets of ordinary people through the VAT increases and taking other money in the cuts in child benefit and elsewhere will further add to the downward spiral of austerity. The interest relief for householders who are trapped in the nightmare of negative equity and extortionate monthly mortgage payments will be welcomed to a degree but is dismally inadequate. That generation of workers who are trapped in this nightmare are victims of the extortion perpetrated on them in the housing market by the immoral speculators legislated for by Fianna Fáil and the PDs. The huge proportion of their incomes that continues to go to the banks massively dislocates the economy. Otherwise those funds would be going to the purchase of goods and services in the domestic economy, stimulating demand and sustaining tens of thousands of jobs for tens of thousands of people who are now on the dole, unfortunately.

This budget is designed to operate within the straitjacket of the capitalist financial market system, putting the interests of the sharks in those markets first because our political establishment, like that of the European Union, is part of that system. That is why this is a right wing budget through and through.

A radical budget would approach the crisis in a radical way. The United Left Alliance has highlighted the massive accumulated wealth in this State that is untouched by taxation. The Central Statistics Office calculated in 2010 total financial assets at €311 billion and non-financial assets at €351 billion. When we subtract financial liabilities of €194 billion, we get net wealth in the State in 2010 of €468 billion. Here is the crucial factor. Credit Suisse, a multinational financial services company, and no socialist organisation for sure, in its global wealth report published in November 2011 calculated the wealthiest 5% of adults in this State own 46.8% of the wealth. Do the maths; this gives the wealthiest 5% of adults in this state €219 billion worth of net assets. Not a cent is levied on this in wealth tax. For every 1% tax levied on that wealth, the yield would be €2 billion. A modest 5% levy would yield €10 billion. Why was this not targeted by the Government rather than children, students and the disabled?

There is a myth propagated by the millionaire-owned media, which suits the millionaires, that high earners in the State are taxed to the hilt. This is not so. From the Revenue Commissioners, we know that in 2009, the highest paid 10,677 units, which could be couples, earned €6 billion and 29% of that income was paid in tax after tax breaks. On average, before tax each unit earned €563,000 and after tax was left clear with €400,000. Taking this into account, and graduating downwards through other very wealthy income earners, the United Left Alliance realistically suggests €5 billion extra tax per annum from this sector. That would be €15 billion in 2012 that could be raised from wealth and the wealthiest in our society.

Eyebrows of course are raised when we mention figures like this. The idea that the super-rich should pay more is considered scandalous. It is fine, on the other hand, to cut the heating allowances of the elderly, the incomes of lone parents and disabled people. It is fine that special needs assistants should be removed from schools. I noticed in the leaders' contribution by the Government earlier, much was made of the fact it had maintained many of them but the 470 who were removed have not been restored and now 700 teachers are in effect being taken out of the system with the new provisions in the budget.

What is the alternative? A socialist alternative would tax the huge accumulated wealth instead of devising further attacks on the working class. A socialist policy would take all the major banks into public ownership, not under the bail-out nationalisation of a sort we saw here, but one where the financial system would be placed under democratic control and management and directed for the benefit of society, not the private profit of speculators and major shareholders. We would begin the regeneration of the economy by major programmes of public investment, especially in infrastructure that would put tens of thousands of our people to work. The United Left Alliance outlines in its budget statement clear examples of where critical infrastructure is necessary, such as the replacement of leaking water infrastructure and other examples, that would take tens of thousands off the dole and begin to regenerate the economy.

All over Europe, especially in Greece, Italy, Spain and Portugal, working people and the poor are being crushed on the alter of the speculators in the financial markets, with livelihoods destroyed, small enterprises wiped out, public services slashed and unemployment spiralling. The economies of Europe are held to ransom by these markets, unelected and unaccountable. The political leadership of Europe prostrates itself at their feet. It is breathtaking that the political leadership of Europe, a so-called zone of democracy, dictates at the behest of the financial markets the unelected personnel of the Governments of Greece and Italy. Unbelievably, the Irish Government raises not a word in protest at this.

The Irish people should make common cause with the ordinary people of those countries of Europe now suffering the consequences of the massive crisis of capitalism and the ravages of the speculators in the financial markets, like James Connolly who, in 1914 faced with a horrendous war in Europe, rather than lying down and doing like other leaders, falling in behind their national establishments, put out a call to the working people of Europe that they should come together and rise up in opposition until, he said, we have "a European conflagration that will not burn out until the last throne and the last capitalist bond and debenture will be shrivelled on the funeral pyre of the last warlord." What a tremendous visionary socialist he was, calling on the working class people of Europe to rise together in opposition to those who were visiting disaster on the continent, on their lives and their societies. How different to the cowardly approach of the Irish Labour Party today and of this Government generally.

Therefore, the United Left stands in absolute opposition to this budget. It has been vindicated in its condemnation of the disastrous policy of austerity and outlines a left and radical alternative that can provide the basis for a solution to this crisis. As the next one, two and three years pass and the disaster is more clearly revealed to our people, there will be more and more support for those policies.

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