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An Bord Snip Nua – A Wreckers’ Charter

20/07/09

Colm McCarthyThe gamblers, fraudsters and robber barons that destroyed the Twenty-Six County economy – pushing thousands onto dole queues and into poverty – must be rubbing their hands in delight at the publication of the Report of the Special Group on Public Service Numbers and Expenditure Programmes.

Those who treated the economy like a casino, but were cunning enough to gamble with other people’s money, have been absolved. It is not they who will pay the price for destroying the economy. Rather, it is pensioners, primary school children, the unemployed, the sick and disabled who will sink further into poverty to keep characters like former Anglo Irish chairperson Seán Fitzpatrick in the affluent lifestyle to which he has become accustomed.

While many hailed the current crisis of capitalism as the death pangs of neo-liberalism, this report has resuscitated that failed ideology in the southern state and served it up as a ‘solution’.

Christened by the Irish media as ‘An Bord Snip Nua’, the Special Group on Public Service Numbers and Expenditure Programmes was established by Twenty-Six County minister for finance Brian Lenihan in November last year.

Lenihan appointed right-wing economist Colm McCarthy as chairperson of the six member group, with a remit “to make recommendations for reducing public service numbers so as to ensure a return to sustainable public finances”. This was music to the ears of McCarthy, a long time advocate of government spending cuts, and other members of the group such as William Slattery, managing director of the State Street Corporation (Ireland), one of the world’s leading investment banks with declared assets of $12.7 trillion.

While State Street investment bank benefited from the $140 billion bank bailout from the US Treasury in 2008, it was able to pay its CEO Richard E Logue a $29 million bonus in March of that year.

The cosy relationship that exists between the various sectors of the ruling class in the Twenty-Six Counties is evidenced in the type of people selected to decide on the future of public services. For these individuals, public services are a burden, state intervention unnecessary and the ‘free market’ the most appropriate mechanism to meet the needs of individuals. Their advocacy of non-intervention by the state, however, did not stretch to refusing the bank guarantee scheme or the bail out.

The capitalist philosophy is based on ‘risk-taking’ and those willing to take ‘risks’ on the market are ‘entitled’ to reap the rewards. There was plenty of risk-taking during the heyday of the Celtic Tiger; however, Irish capitalists were not risking their own money and have not paid the price for the failures.

Given the calibre of those on the group, it is hardly surprising that they chose to take a hatchet to the public sector and recommend savage cuts, directed specifically at the most vulnerable in society. A total of €5 billion in cuts are proposed, over two-thirds of which are directed at health, education and welfare.

According to the report, the basis of its evaluation lay in raising questions about the “necessity for the provision of the service and the reasons why public service provision might be warranted rather than allowing the private sector provide the service”. In other words, the only consideration was of the crude economic ‘cost-benefit’ type and not the social need to provide public services as a right. Nor the fact that the majority of the population rely on public services. In a further slap in the face to working people, the authors of the report declared their firm opposition to the idea of tax increases, arguing that speedy implementation of their cuts would “minimise the need for tax increases”.

The authors of this report are of the clear view that people’s needs can be best served through the private market and are somewhat surprised that welfare, education and health take up a sizeable proportion of state expenditure. What they fail to highlight is the fact that public services in the state have been chronically under-funded and that, notwithstanding the ‘boom’ years, state spending on public services as a proportion of GDP was consistently below that of other EU states.

Indeed, the Organisation for Economic Cooperation and Development, a highly conservative body, has highlighted the lack of investment in education in the Twenty-Six Counties. Its report, Education at a Glance, published just last September, showed that the southern state was 27th out of 29 states in the amount of GDP per capita invested in each second-level student and that the proportion of GDP invested in education had been reduced dramatically from 5.2 per cent in 1995 to 4.6 per cent in 2005.

Meanwhile, health care in the South is characterised by a two-tier system whereby treatment is determined by income rather than need. Public patients can wait years for treatment in hospitals while private patients, those who can afford to pay, receive treatment within weeks. For good reason, many have described the health service in the Twenty-Six Counties as an apartheid system.

The Celtic Tiger years also witnessed a substantial increase in relative poverty. The 2001 UN Human Development report placed poverty rates in the Twenty-Six Counties as the highest in Europe. Towards the end of the decade, the numbers at risk of poverty remained considerable; in 2007, the at risk poverty rate in the Twenty-Six Counties was 16.5 per cent, with children being most at risk. Combat Poverty estimated that 100,000 children were living in consistent poverty in the state in 2007.

This is the context within which Colm McCarthy and his team of economists were operating and chose to ignore.

The recommendations contained within the McCarthy report amount to a full frontal assault on the provision of essential public services and a neo-liberal charter that advocates the ‘out-sourcing’ of public services, the privatisation of public transport and the imposition of domestic water charges. It does nothing to address the jobs catastrophe that has seen a 100 per cent increase in the level of unemployment in just 12 months, with 418,000 now on the live register, compared with 220,000 at the same time last year. It will, if implemented, drive thousands further into poverty and create even greater inequalities across society. The extent of the savage cuts being proposed is outlined below:

  • Five per cent cut in all social welfare payments
  • Twenty per cent reduction in child benefit
  • Axing of the Family Support Agency
  • No re-introduction of the Christmas ‘bonus’ payment for welfare recipients
  • 17,300 job cuts in the public sector (primarily in health and education sectors)
  • Closure of the Rural Environmental Schemes
  • €44 million cut in local and community development programmes
  • €9 million cut in Gaeltacht schemes
  • €2 million cut in drugs task force projects
  • Closure of rural primary schools
  • Reduce the number of Special Needs Assistants by 2,000
  • Increase the pupil-teacher ratio
  • Ten per cent reduction in the school capitation grant
  • Charge parents €500 per annum for school transport scheme
  • Means test special needs school transport
  • Reduce level of Third Level maintenance grant
  • Cuts in funding and staffing levels in colleges and universities
  • Cuts in Community Employment Scheme
  • Introduce domestic water charges
  • Cuts in overseas development aid 1
  • Restrictions on access to medical card
  • Imposition of €5 prescription charge for those on medical cards
  • Increase in threshold for Drugs Payment Scheme from €100 to €125
  • Increase in Accident and Emergency charges from €100 to €125
  • Axing of the Western Rail Corridor
  • €55 million cut in public transport
  • Axing of the rural transport scheme
  • Closure of rural rail services
  • Privatisation of Bus Éireann Expressway Service

The social impact of these cuts, if implemented, will be utterly devastating. The west of Ireland is effectively being cut off from the rest of the island. The Dublin 4 economists who prepared this report have clearly no understanding of the importance of public transport for rural communities and no interest in supporting the Irish language and Gaeltacht communities.

Clearly oblivious to reports of an increasing heroin epidemic in Dublin and Cork, the report proposes cuts in both drugs programmes and community development programmes. Proposals to cut welfare rates and essential health and education services will push those on social welfare deeper into poverty. Rural communities and urban working class communities are being asked to pay a huge price for the greed of a small but powerful elite in Irish society.

Responding to the report, éirígí chairperson Brian Leeson said: “This report reflects the thinking of a government committed to a failed neo-liberal ideology.

“While Colm McCarthy may have chaired the group, Fianna Fáil’s fingerprints are all over it. For the last 12 years, Fianna Fáil in government has been more interested in supporting the interests of a privileged elite in Irish society than addressing the needs of the majority. Rather than investing in public services and developing universal health and education systems, it chose to facilitate private profiteering.

“Working class communities in rural and urban areas are suffering because of the greed of Fianna Fáil’s developer friends. Not content to risk billions of euros of taxpayers’ money in bailing out the very people who created the economic mess, Fianna Fáil, through their proxy Colm McCarthy, is proposing both utter devastation upon the most vulnerable in Irish society and the gutting of the public sector. This cannot and will not be allowed to happen.

“éirígí is calling upon communities, workers, trade unions and activists to mobilise in their tens of thousands to prevent these cuts. It is the only way in which they can be stopped. The choice now is simple: the business and political class wish to cement a society based on greed and poverty for the majority, the rest of us must build a vision of a country based on public ownership and a decent life for all.”

 

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