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Government to cut Old Age Pension in Octobers Budget?

tiger_1767251cDaniel McConnell reports in this weeks Sunday Independent that the Government is due to cut the old age pension in Octobers Budget.  

Whatever hope this Government and in particular the Labour Party have of sustaining support ahead of the local and euopean elections next year will surely be severely damaged if they incur the wrath of the ‘grey vote’.  Recent union unrest, the return to recession and falling retail confidence all signal a wave of frustration, caution and annoyance amongst the public.  This move could be the tipping point that pushes voters and tax payers too far.  Daniel McConnell, John Drennan and Fionnain Sheehans report highlights in depth how deep the cuts to the old age pension will be and what other cuts are looming in what appears to be yet another austerity fuelled budget.  Daniel McConnell of the Sunday Independent will be on Newstalks Coleman at Large on our panel this Wednesday from 10pm until Midnight discussing these proposed budget cuts and the other issues of the day.

ORIGINAL ARTICLE FROM THE SUNDAY INDEPENDENT, 11TH OF AUGUST: http://www.independent.ie/irish-news/government-warned-to-prepare-for-war-over-pensions-cut-29489715.html

Government warned to ‘prepare for war’ over pensions cut

‘Grey revolt’ on cards as Labour TDs threaten to walk over austerity budget

Pensioners protest outside Leinster House in 2008

FIONNAN SHEAHAN, DANIEL MCCONNELL AND JOHN DRENNAN – 11 AUGUST 2013

The Government is being warned to “prepare for war” if it tries to cut the old-age pension.

ALSO IN THIS SECTION

 

The coalition is being urged to clarify its position following reports in the Sunday Independent of a planned €10-a-week cut to the old age pension.

Fianna Fail social welfare spokesman Willie O’Dea said such speculation frightened the elderly and would be resisted.

“If Joan Burton is ready to acquiesce with another attack on the most vulnerable, she’d better be prepared for war,” he said.

“I want the Government to make an unequivocal statement that this is not going to happen,” he said.

Senior coalition sources told the Sunday Independent that the Government wants to cut the old-age pension to meet a €3.1bn Budget Day target, senior coalition sources have said.

At present, more than half-a-million pensioners receive payments of up to €230 a week from the State.

It has now emerged that a proposal to means-test the pension has been overtaken by discussions that it be cut instead.

The total cost of the old-age pension, or the state contributory pension, is €5.3bn a year.

The International Monetary Fund, which forms part of the Troika, told the Government last September to cut the old-age pension as well as the minimum wage, social welfare payments and child benefit as part of a range of measures to reduce the budget deficit.

While details of the proposed cut to the old-age pension are not yet finalised, it is estimated that a €10 a week reduction across the board would realise a saving of between €250m and €300m.

Five years on from the “grey revolt” of pensioners — which forced the then Fianna Fail-Green Party coalition to reverse a planned removal of medical cards for the over- 70s — it has emerged that worse-than-expected growth figures have led officials to warn that the full €3.1bn adjustment will be needed.

According to senior government figures familiar with the budgetary process, recent Labour demands for a softer Budget have been deemed “unrealistic”, given the necessity to meet targets laid down by the Troika.

They say particular focus has been turned on reducing so-called universal payments which come under the control of Social Protection Minister Joan Burton.

However, last night many within the Labour Party were adamant that any move to implement such draconian cuts, particularly in Ms Burton’s department, would result in a collapse of the Government and an early general election.

Within Labour, a revolt against austerity is being driven by a group of five Gilmore loyalist backbenchers who said the cuts demanded of Ms Burton are “not possible, not wearable and not do-able”.

Behind all the political kiteflying of recent weeks, the proposed old-age pension cut is just one of a host of “fucking awful” measures actively being considered, one Government source said.

In what will be the eighth austerity Budget since 2008, to be revealed on October 15, the measures include:

● Cuts to child benefit.

● Cuts to widows’ pensions.

● Cuts to rent allowances.

● Cuts to TV allowances.

● Sweeping cuts to “non-core” health services, including elective surgeries, home helps and carers amid fears that a budget day bailout for MinisterJames Reilly will be needed.

● “Bursting” of pupil-teacher ratios in primary and secondary schools by two per classroom.

● Further cuts to 10,000 special needs assistants, and

● Major cuts to third-level funding and the spectre of higher than expected thirdlevel fees.

Despite protestations from Ms Burton and her party leader, Tanaiste Eamon Gilmore, that child benefit would not be reduced, officials familiar with the budget process are adamant that further savings will be “absolutely necessary” for Ms Burton to meet her cuts target of €440m.

Any attempt to impose such a level of austerity will cause serious political difficulties for the high-profile minister.

Ms Burton has repeatedly made it clear that outside of protecting child benefit, her other political priority in welfare was the protection of pensioners.

She told the Sunday Independent: “It is important that we realise pensioners are paying their way and it is important that pensioners know their incomes are secure.” Any reduction in child benefit and pensions would be seen to represent a major political defeat for Minister Burton.

Yet both the Department of Finance and the Department of Public Expenditure and Reform are operating on the basis that she will find the cuts, and have said “there is no scope to ease her targets”.

In a major hardening of the Labour position, party TDs including John Lyons,Arthur Spring, Eamon Maloney and Michael Conaghan have told the Tanaiste that the current €440m of cuts, or anything even near it, are not tolerable.

Speaking to the Sunday Independent, Kerry TD Arthur Spring said the growing tensions between the coalition parties was a welcome development.

“I welcome this unveiling of the differences between Labour and Fine Gael,” he said.

“Social democrats and right-wing parties are not natural coalition partners.

“For the first time the divide — the different colours of the parties — is becoming very apparent. “Labour will continue to protect the values that separate us from our coalition partners.” Mr Spring added: “If we do not get a compromise, people are going to have to ask if they’re willing to go.” Should an election occur, said Mr Spring, no one in Labour has “anything to be embarrassed about if we end up facing the people at the doors”.

Meanwhile, Labour TD Kevin Humphreys has warned that the party will “not accept a red cent more in extra austerity”.

He said Labour backbenchers are working together to articulate the party’s values in advance of the Budget, and criticised those within government who he said “seem to have developed Stockholm Syndrome with the Troika”.

He also warned that if the escalating split on austerity was not resolved, it would “certainly lead to a marked deterioration of relations between the coalition partners from which we might not recover from”.

We must avoid austerity measures in Ireland’s Budget 2014, to move us out of recession. (Archive Article)

Government’s export led recovery nosedives, as Ireland returns to recession for first time since 2009.

Ireland officially re-entered recession yesterday as CSO (Central Statistic Office) figures showed a decline in economic activity after recent favourable upward trends of economic growth.  The figures show that GDP fell by 0.6% in the first three months of this year, driven by a significant fall in exports.  Revised estimates for the second half of 2012 showed Irelands GDP had fallen by 0.2% in the fourth quarter, which technically means that Ireland is back in double dip recession, after two economic quarters of negative growth and in essence a third successive fall in GDP when seasonally adjusted.

Personal spending in the first three months of this year is also down by 3%, which is a sharp reduction in consumer spending in the indigenous economy.  The news has once again brought the Governments austerity and adjustment agenda into sharp focus, with concerns being voiced over another budget that restricts the levels of disposable income in the economy.  Those opposed to the Governments austerity policies have pointed to this Octobers Budget as an opportunity to address the imbalance and to change course and reinvigorate spending in the economy.

Ireland is now back in recession for the first time since 2009 after years of austerity fueled budgets, massive cuts in public spending and hardship imposed on the Irish public.  Simply put the Governments austerity agenda has not worked and has only served to restrict spending and depress consumer demand.  If the shackles of ongoing cuts and austerity are not lifted in Octobers budget, it is unlikely any growth in the economy can be foreseen.  KBC Ireland economist Austin Hughes said today, “It’s very fragile and it probably means we have to be very careful about the scale of adjustment in budget 2014,”

So as Budget negotiations begin in cabinet, what choices will the Government make and will they concede that their export led plans for growth are not working, will they succumb to the allure of further austerity and will they have the common sense to put more back in peoples pockets so they can spend in the economy.  They have the opportunity to do this if they utilise the €1 billion euro in savings from the promissory note deal to protect and even improve welfare benefits, increase the minimum wage, ease taxes and cuts, rather than use it solely for capital spending.

Today’s CSO figures make it blatantly clear that austerity is not working and whatever the opinion of the Troika, the surplus funds must be used to ease the level of burden on taxpayers.  We desperately need to follow our own course, to be masters of our own destiny once again and remove the shackles of austerity imposed upon the Irish people by the Troika of the IMF, the ECB and the European Union.  The Troika has driven us down the road of cutbacks and severe austerity and today’s figures make it quite clear that this policy has not worked, we need to reclaim our budgetary process and make it one that is going to invigorate growth, confidence and spending in the Irish economy.

Austerity Ahead! (Archive).

Austerity  Twenty five years ago this past week, Ray Houghton unwittingly started a cultural revolution and a revival of confidence in the Irish psyche with a looping header after six minutes into the back of the English net in Euro ’88.  Little did we, or the Irish soccer team know that day, that this was the catalyst for the beginning of a new Ireland that believed in itself and one that had, in some small way, removed the shackles of British imperial subservience in the mindset of a people beset by seven hundred years of subjugation, subservience and suppressed sovereignty.  Little did we know that a mere twenty five years later, that the baton of our sovereignty would be ensconced in the sweaty paws of Brussels for the last five years, with no end in sight.

In the eighties, we didn’t have massive personal debt, we didn’t have massive mortgages in negative equity, what we did have was 60 pence in the pound taxation, with PRSI on top of that, we had a wage at the end of the week, a shitty car in the driveway that was paid for outright, and we had a tab in our local shop, that we cleared at the end of the week.  Now the wise sages blame our own personal greed, but not all people in this state were greedy, they simply tried to make a future for their family, by buying a home, having a holiday once a year and maybe a half decent car in the driveway.

Fast forward to the nineties, when Italia ’90 and USA ’94 propelled us onto the world stage as a half decent bunch of footballers that very few countries wanted to face, and Feile and Riverdance were the Irish cultural phenomenon’s for the nation.  I remember spending Christmas Day alone in a friends house in the North West of Ireland, and I vividly remember watching The Lyrics Board (a bizarre Irish international success story in TV land throughout the world), drinking a few glasses of Dark Rum and tucking into a healthy meal of Beans and Sausages, but this was après college time in my life and the future was bright and the prospects of better days were blooming!  That was an Ireland where things were tough for many people in society, but things were starting to turn the corner, quickly for many, but slower for others.

In the interim, this country has seen unprecedented building growth and infrastructure throughout the country, but also a legacy of greed and materialism.  A house of cards economy was built upon speculation, political ineptitude and drastically over inflated property.  As headlines about Bank bailouts, Recovery funds, NAMA and the odd billion here and there dominate the media, these news stories mean nothing in real terms to the people trying to make ends meet, huddled masses grumbling in corners of near empty pubs whilst ‘doleing’ out shrapnel of 10 and 20 cents, to pay for maybe one more pint!

Those in the media and those economic geniuses tell us that people are hoarding their money and squirreling it away, the former Taoiseach warned us against this, and pointed the finger of blame at us for not putting money back into the economy and it seems the current Government doesn’t have too much faith in the plain people of Ireland either as they test the waters for continued austerity.  Large swathes of the media gazing out of their ivory portholes, see recovery on every corner, in city centre wine bars, celebrity chef restaurants and Über sophisticated café bars, they don’t seem to frequent the rural and urban working class pubs, bookies and greasy spoons that are empty or closed.

Maybe I hang around in the wrong circles of society, but I don’t know who these people are with their butter mountain like reserves of acorns are.  Who I do know, are the people who can’t afford to pay their Mortgages, their Management Fees, their ESB, their Gas bills, their phone bills, their TV bills, their Child Support and Childcare, their Insurance, their Rent, their Loans, their Credit Cards, their Food Bills.  The facts of the matter are that there are people who are being hounded by banks on a daily basis to make repayments they are unable to afford, there are county and city sheriffs throughout the country being instructed to recoup goods from peoples homes, there are homes throughout the country, lit by candlelight tonight because the electricity has been disconnected, there are visits from volunteers from St. Vincent De Paul to help those who can’t afford food and bills and rely on the generosity of others, and most of all there are people who can’t take all of this anymore, Irish people who are stretched beyond all belief, depressed, ashamed, afraid and in the most extreme cases, suicidal, primarily due to their financial worries.

So why are these people who didn’t spend excessively, again and again being the ones who are targeted and being focussed in on for ongoing cuts, after being subjected to a call to patriotic duty over the last few budgets.  It appears that those who are in financial difficulties are yet again in the firing line for another few budgets of hardship, as they were targeted in previous Budgets, since the economic collapse and meltdown of the Irish economy in 2008.  There has been cold comfort from our Government’s since then, most recently with warnings from our Minister for Finance, Michael Noonan, some months ahead of the Budget last December, who said that last years EU deal on bank debt would make no difference to the fiscal calculations, and true to the Ministers word, this is what transpired as the public was hit with yet another austerity fuelled budget.

Even though we’ve been the good little Europeans and we passed the Fiscal Compact Treaty like they told us to, rowed in state expenditure and capital spending, are in the process of further reducing public pay through Croke Park 2 to the chagrin of public servants and sucked up the property tax once the heavies from the Revenue Commissioners were enlisted to deduct the payments from source, it seems the allure of the roulette wheel of fortune at the Austerity Casino is too enticing for this Government to give up in any budget too soon!  Even though the liquidation of the IBRC (formerly Anglo Irish Bank) will harvest annual savings of €1 billion euro to the exchequer, it is very unlikely that the savings will be used to ease the burden of the next budget according to jolly old Finance Minister, Michael ‘Ebenezer’ Noonon.  The Minister for hardship and widespread burgeoning penury, stated in February that there still remains ‘a significant gap’, between the amount recouped by the Government on an annual basis and that which the Government spends.  His coalition partners in Labour, however, are anxious to use these savings to ease measures of austerity imposed on the public in Budget 2014, and as they hover at a PD, Green Party like sub 10% approval rating, the implementation of these of these savings may well be their only way back from electoral annihilation in the next election.

In April it was reported the ‘Irish taxpayer would be in line to get back some of the €32bn they poured into distressed Irish banks’, at the height of our banking crisis, when EU finance ministers agreed to speed up the creation of a banking union that would recapitalise troubled lenders.’  However, at the Economic Ideas Forum in Helsinki on the 7th of this month, the Taoiseach was not as positive on the issue and said it would be a matter of discussion and negotiation “towards the end of the year and into next year”.  “We are not in a position to give a date for delivery, that is an issue still up ahead of us in terms of negotiation and discussion.”  So, it appears that may be as far as the optimism on this once eagerly expected deal goes, with senior sources in the EU saying that it is becoming increasingly unlikely that any deal on retrospective direct recapitalisation of banks will now happen, due to lobbying and staunch opposition from the bureaucrats and technocrats in Brussels.   So where is the leverage the Government promised us they would exert while we held the presidency of the Council of the European Union over the past six months?  Just so we haven’t forgotten that our national sovereignty is a keepsake in the bosom of Brussels, it was announced last March that the budget this year, and every subsequent year, will be brought forward to October, on the diktat of the European Commission to ensure it complies with EU law.  That’s means austerity will land on your paycheck and in your pocket early this year!

TD’s, Ministers, Top Level Civil Servants, High Ranking Academia (not humble part timers like me!), the Medical Profession and others have no idea of how difficult it is to survive from week to week, so why don’t they truly experience cuts to their massively over inflated pay?  Because this is an unequal society, where the marginalized, the pensioners, the unemployed, the low paid and those who did not benefit from the boom are expected to spend money to stimulate the economy and are expected to do so whilst also seeing their income be slashed in the common good.  We need to realise that the marginalised are always the ones targeted by the upper echelons in society who will never truly experience poverty and penury!  Continuous austerity may to some degree contribute to easing our national debt burden, but at what cost?  When the dust settles on nearly a decade of austerity, what kind of society will be left in the wasteland ruins of the homes of the working class, coping class and negative equity generation?

Labour Electoral Pains. Will you vote for them? (Archive Article)

EamonGilmoreTwo and a half years on from the General Election, little has changed or improved in the Irish economy or political landscape.  Initially voters placed their faith in a new coalition of change and hope, but alas the electorate have found themselves disillusioned by the policies, poise, arrogance, aloofness and egotism of the Fine Gael/Labour coalition Government.  Currently the country has returned into recession and the dependence on an export led recovery has failed to materialise, consumer confidence is still very low, stealth charges and taxes are crippling households and personal debt and the mortgage crisis is seriously impeding any possible recovery.

Although Fine Gael have not been hit as hard they have seen a drop in support in the region of an average of 12%, whilst Labours support has been wiped out to such an extent that if they do not address the decline they are facing a cataclysmic meltdown that would see them retain only five to ten TD’s at the next General Election.  It is argued that polls are only a snapshot in time and a General Election is over two years away, however Labours implosion is so significant that it hard to see how they will reclaim their working and coping classes support.

In Dublin South Central where I live, there are three sitting TD’s, from the poll figures and from the clear anger amongst the local electorate it is hard to see any of them being returned come the next election, but what is of immediate concern to the Government parties is how they will perform in next years local and European elections.  A wipe-out in Local Government chambers of Labour councillors is on the cards on a scale faced previously by the PD’s and The Green Party.  Eamon Gilmore has faced a major backlash over the policies being adopted and implemented by his party and it is now incumbent on him to redress the desperately dwindling support his party has faced since the highs of 2011′s presidential campaign victory.

Only this week Labour lost their MEP Nessa Childers and Meath councillor Jenny McHugh.  Although Childers has been somewhat detached from the party for some time, McHugh has left to join Fianna Fail. Cllr. McHugh, who is a Navan-based school principal, cited the Governments educational policy as the reason for her defection and she said she was joining Fianna Fail to play an active role in addressing the hardships imposed on the educational sector and ”tackling the unfairness at the heart of this Government’s agenda”.  It appears many Labour politicians have been planning exit strategies in order to distance themselves from the party ahead of European, Local and General Elections.

Several TD’s have also lost the Labour party whip in the past two or so years, with Roisin Shorthall, Tommy Broughan, Patrick Nulty, Willie Penrose, Colm Keaveney and Senator James Heffernan all voting against the Government on a variety of issues.  Of these members Childers, Nulty and Keaveney also resigned from the party, with Childers stating in April last that she ”no longer wants to support a Government that is actually hurting people”.

So what will become of the Labour Party and can the party address the dramatic decline in support that saw them secure thirty seven seats (now 33) in the last General Election, at present their support is somewhere between nine and twelve percent according to the polls.  After the by election disaster that saw them finish fifth in Meath East behind Ben Gilroy, the Direct Democracy candidate, with the Labour candidate Eoin Holmes securing a miserly 4.6% of first preference votes, the party needs serious regrouping and desperately needs to secure major concessions in Octobers budget.  If there is another austerity budget the backlash will be realised in massive losses in January in the Local and European elections, particularly in working class constituencies where Labour thrived in the General Election.

Labour has said it intends to run candidates in all of the European election constituencies, in 2009 the party had a 3.4% swing, which saw it return three MEP’s, this time around if the recent opinion poll results bear fruitition it is unlikely the party will retain any European seats.  In the local elections of the same year Labour returned with 132 councillors and was dominant in most of the Dublin councils, this time around it is very likely that number will be decimated.  It is to be seen who will pick up the shortfall with Sinn Fein not making the expected gains at Labours expense, it may well be that Independents. Fianna Fail and new emerging parties such as Direct Democracy will fill the void.

The Labour Party has lost sight of the parties ideals and principles in order to govern and hold power, they argue that the policies they are implementing will rebuild the country but all their grassroots supporters can see is a party that has by and large ignored its election pledges that returned them to power and forced greater austerity and hardship on the Irish people.  If they don’t address this perception and reality of the impact of their policies on the struggling classes the party will find itself poisoned by the same cursed chalice of the minority Government partner that destroyed the Progressive Democrats and The Green Party.

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One comment on “Government to cut Old Age Pension in Octobers Budget?

  1. irishonlineradio
    November 1, 2013

    Reblogged this on John O'Donovan.

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