Instead, before the day of strike action had even ended, Peter McLoone, general secretary of IMPACT and Chair of the Public Services Committee of ICTU conceded, as does the Labour Party, that cuts of €1.3billion in the public service pay bill are necessary. Then having given this massive ground they thought they could mitigate the anger of rank and file union members by offering up these cuts in the form of unpaid leave.
I and the Socialist Party do not accept the premise of the cuts and unlike the ICTU leadership and the Labour Party are prepared to argue for an economic and political alternative. A quick examination of the Gross Domestic Product statistics, freely available from the Central Statistics Offices, makes clear that the line of the political establishment, right wing economists and media that there are ‘no pots of gold’ to tax is far from the case.
In 2008, the effective rate of tax on profits (including that declared by the self employed) amounted to a miniscule 10.3% (approximately €6 billion tax out of €58 billion profits).
The corresponding figure for wages including PRSI is 28% (€22 billion tax out of €79 billion in PAYE wages). If profits in 2008 were taxed at the same effective rate as wages, a rate that would still be less than the US and the rest of the EU 15, an extra €10 billion would have been available to the exchequer.
Ireland’s economy as a whole is taxed at 34% of GDP when one factors in all sources of revenue including VAT etc. The corresponding figure for other developed economies is typically 45%. The discrepancy between Ireland and the other countries can in the main be attributed to the tax cuts in the areas profits, rent, dividends, capital gains and inheritance.
None of these facts ever feature in the big business owned media. Instead we have had a fifteen month campaign of disgusting vilification of public sector workers. This is designed to steer the focus away from the cabal of speculators, developers, big bankers and establishment politicians who are responsible for the crash, and to sort out the Exchequer crisis by making workers pay.
The policy of slash and burn will cause thousands of more job losses in the economy. However, the Government doesn’t care about this as its perspective is that the recovery of capitalism in Ireland will come largely from exports. Their objective therefore is to further prostrate Irish society at the feet of the multinationals via low pay and low tax on profits and hope for a rerun of the Celtic Tiger.
The government of Macedonia is currently running an ad on business TV channels like Bloomberg, encouraging foreign direct investment on the basis that its corporation tax is 0% and the average monthly wage is €430! This is a race to the bottom that cannot be won by Ireland.
We counterpose the democratic harnessing of the wealth alluded to above, for the benefit of society rather than corporate super profit. We demand, not massive bailouts of banks and developers, but nationalisation of the banks under democratic control and the funding of a massive programme of necessary public infrastructural projects which would put tens of thousands back to work. We seek publicly owned, and democratically run, new state enterprises such as an Oil and Gas Prospecting and Recovery Agency to use our natural resources for society rather than handing it to companies like Shell Oil.
Trade union leaders have long lost sight of their core role which is to defend their members’ pay and conditions. They had no mandate to propose pay cuts of 4.6% in the form of unpaid leave. It was shameful that they trade union called off the second day of action scheduled for 3rd December in return for another fruitless discussion which the government guillotined last Friday. ICTU leaders have demonstrated themselves utterly incapable of arguing a radical alternative to the cuts that would give confidence to workers in the public and private sectors and to the unemployed to fight for a decent society to replace this failing capitalist system.
Furthermore, one has to question whether the current top leadership is really capable of an empathy with ordinary people given the massive salaries they receive that put them materially closer to government and employers than their own members. The membership need to reclaim their trade unions as fighting organisations to defend workers whether unemployed or working, public or private sector. This means a new leadership democratically accountable and living on the same wages as the ordinary members they represent.
A determined forty eight hour strike action in the public sector, linked to an appeal to all workers to support the principle that working people must not pay for the crisis, would be the beginning of a real fightback to stop the cuts and force a change in policy. That this could bring down the Government would be an extra gain making possible a serious discussion of the need for a serious political alternative for working people.
I would encourage workers and social welfare recipients to come to the Dáil on Budget Day, this Wednesday, at 1pm and demonstrate against this Budget.