A Democratic Economy, A Prosperous Society, A Risen People

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This is the speech I delivered at the May Day Conference organised by the five trade unions affiliated to Right2Water

May Day Conference

When the Left wins the next election and forms the first progressive government in the history of the state, it will be inheriting severe economic and social deficits:

  • After seven years of recession and austerity our social infrastructure, in particular health and education, is in desperate need of repair
  • Nearly 1.5 million people live in deprivation
  • A crisis in low-pay and precarious work conditions
  • An investment crisis
  • One of the weakest indigenous enterprise sectors in Europe with an industrial policy that is mostly based on maintaining Ireland’s role in the global tax avoidance chain
  • And a golden circle of corporate and political interests which will fight like hell to expand their spheres of control

And if these aren’t challenges enough, the range of interests that will line up against us will be daunting.  Fine Gael and Fianna Fail will be the least of it.

IBEC, ISME and the SFA, Chambers Ireland and the American Chambers of Commerce, media outlets and commentators, Independent House, CEOs, EU institutions, the IMF and the OECD – a whole alphabet of hostile forces who will from the first day work to undermine us, destroy people’s confidence, and put up every obstacle possible.  And that’s just for starters.

If you’re in any doubt, just ask Syriza.

The five trade unions affiliated to Right2Water are seeking to bring together all the ideological, historical and community strands that constitute progressive politics to help meet these challenges.

  • To start a constructive dialogue that will hopefully lead to an agreed set of policy principles that will form the core of a progressive government.
  • Principles that are radical and deliverable, an alternative economic, social and political architecture based on a new common sense
  • Principles that give people confidence that we have an understanding of their everyday problems which leads inexorably to a collective and shared resolution.

We have started this process in the principles we have produced here today.  We will be adding to them.  They are not in any order of priority – but they are all urgent. We invite everyone here to contribute to this process and to come together on June 13th to debate and decide.

The Low-Tax, Low-Spend, Low-Service, Low-Investment Economy

One of those urgent tasks is to break from the low-tax, low-spend, low-investment, low-service model the Government is foisting upon us.  This is the trap celebrated in the Spring Statement – a set of budgetary rules that will permanently immobilise national governments and impoverish the European people.  What can you make of this fiscal rule cookbook?

You-take-heaping-of-a-10-year-rolling-average-of-potential-GDP-which-cannot-be measured-in-the-real-world,-based-on-components-like-Total-Factor-Productivity-which also-cannot-be-measured,-stir-in-a -convergence-margin,-pour into-the-GDP-deflator-and-put-in-the-oven-and-bake-until-the-reference-ratio-minus-the-convergence-margin-divided-by-100-and-multiplied-by-the-%-GDP-price-deflator-determines-the-allowable-nominal-spending-growth-net-of-DRM-or-discretionary-revenue-meausres.

Take from the oven.  And don’t forget to subtract one.

There is one word for this – mindless.  This is Father Ted economics.

A progressive government will have to deal with these rules – now in our Constitution, approved by the majority of people even if under duress.  We will need to push them out at every opportunity.   At the same time, we must work with our comrades in Syriza, and Podemos when they form the next government in Spain, to unravel these rules.

For the June 13th conference the Right2Water unions will publish an alternative fiscal framework – to inform the discussion of how we can turn the rules to our advantage.

The Government is launching the second phase of austerity.  In the first phase, Ministers announced actual cuts in public spending.  In the second phase, public spending will be kept below the rate of inflation, thus cutting its value.  This at a time of increased demographic pressures. We are facing into an indefinite period of what can be called ‘real austerity’.

A progressive government will reverse this.  We do not fully appreciate how little we spend.  We would have to spend an extra €10 to €12 billion a year more just to reach the average spending on public services, social protection and investment of other EU countries.  The Government claims they will do more with less.  The reality is that they will do less with less.

Why?  Because the Government is locking-in a low-tax economy – one that will benefit the interests of capital over people.  The Government is pulling off the same stunt that Fianna Fail did prior to the crash – driving down taxation to unsustainable levels.  Except today we don’t have the windfalls of speculation, today we are bearing the cost.  Therefore, the Government will drive down living standards and privatise and outsource public services to subsidise its tax cuts.

Progressives compete over tax cuts at their peril.   Workers in Ireland are not highly-taxed by EU standards. However, our living standards are highly taxed, highly priced and highly inadequate.  We are driven into the private sector to purchase goods and services that workers elsewhere receive for from the public sector for free or at below-market rates.

The Need for a Strong Social Wage

A recent RTE current affairs programme showed that in France a GP visit costs €7, childcare and early education is free and if you are made unemployed you get 80% of your last wage – light years from where we are.  But the panelists complained that Irish people weren’t willing to pay the taxes needed to provide this standard of living.

What they didn’t know – or weren’t saying – was that Irish workers pay higher personal taxes than French workers.   So how can they afford it?  The social wage – or employers’ social insurance.   A strong social wage allows workers to avail of services such as health care and prescription medicine for free or at heavily subsidised prices; it provides workers a range of benefits such as pay-related sick benefits, enhanced family income supports and pay-related pensions which means workers aren’t forced to rely on costly and uncertain private pensions.    If Irish workers received European level of social wages, we’d have €8 billion more to spend on public services and income supports.

And with a strong social wage taking over expenditure in public services and social protection, the Exchequer would be freed up to invest in

  • Affordable childcare, early childhood education and truly free education for all ages
  • Increased supports for the elderly and disabled
  • Quality nursing homes
  • Affordable recreation facilities, and, most importantly
  • Our economic infrastructure: imagine if every business and house had access to state-of-the-art Next Generation Broadband, new public transport solutions to traffic congestion in urban area and quality services in rural areas, commercialising ocean energy,  a home for everyone in need or not having to boil our water or have sewage dumped in the local river.

Let’s be clear:  without a strong social wage, either Irish workers will have to fund these services, income supports and investments or, more likely, they will continue to do without. A progressive government will not let this to happen. It will introduce a New Social Contract based on the expansion of the public economy funded by a strong social wage so that people can fully participate in collective and share provision.

The Sop to the Low-Paid

The Government is throwing a sop to the low-paid, promising to take hundreds of thousands out of the tax net.  But the problem for the low-paid is not that they are taxed. The problem is that they are low-paid, working under the burden of zero and low-hour contracts, denied the basic right to bargain with their employers, leaving them with little if any power in the workplace.  A few extra Euros in the pocket will not make up for this oppression and will, in fact, undermine the state’s ability to promote their living standards.

Progressives, therefore, will champion the Living Wage, not by relying on exhortations and the good-will of employers, but through concrete strategies to make the Living Wage a reality.  We will strengthen and extend Joint Labour Committees so as to empower more and more workers through mandatory bargaining.  We will introduce an authentic right to collective bargaining – not through some backdoor mechanism.  We will walk through the front door because the house belongs to us as well.

We will make Ireland the best little country to work in.

Business in Ireland is too Important to be Left to Irish Business

But to make work pay, to provide increased life-opportunities – for workers, for the community and the economy – we will need to talk about wealth generation.  The Left used to talk about production – how to organise it through the various models of ownership that are socially accountable.  But somewhere on the way to the 21st century we ceded the issues of production and wealth generation to employers and the business pages.   With honourable exceptions, we contented ourselves with debating how we redistribute the wealth created by employers.  We became welfarists in the capitalist economy.

We must take this ground back.  We must, again, talk about production.  We need to campaign on our own definitions of competitiveness, flexibility, and entrepreneurship.

We need to organise a prosperous indigenous enterprise sector  through the creation of new and expansion of existing public enterprises; a new framework for local government enterprises and new business models based on co-determination between public, private and civil society ownership; and a new contract for enterprise support based on investment and labour rights.

The campaigns over our oil and gas reserves, woodlands, clean seas, heritage sites, and community life point to another key aspect of our indigenous sector –  ‘resource democracy’.  If the people of Ireland have a right to the natural resources of Ireland then those resources must be entrusted to public and transparent control, providing the right of people to direct and benefit from sustainable developments.

And let us never ever forget the fundamental lesson of the crisis – that we cannot rely on private banking based on short-term shareholder interests to serve the needs of the productive economy.  We need a public banking system for households and businesses – one with a mission statement that makes the bank partners in people’s living standards and enterprise success.

We must enter into the debate over wealth generation.  Business in Ireland is too important to be left to Irish business.

And debt is too important to be left to creditors and bankers.  A progressive government will promote a European Debt Conference in order to write down public debt – not just for the peripheral countries but throughout Europe.  A progressive government will apply the same principle domestically.  It is an obscenity that the same institutions that created the crisis are allowed to drive the resolution of that crisis – household debt.  When prices are so systemically out of line with value, you side with the debtor and bring the price back to economic reality – through write-downs and restructuring overseen by a democratically accountable public agency that works in the public interest.

From the

  • existential crisis of climate change that will necessitate a new economic order of sustainability to
  • political reform that must encompass not only a reconfiguration of parliamentary practices but a deepening of popular democratic interventions in the decision-making itself to a
  • housing policy that is not just about supply but seeks to break the speculative nature of housing provision through new ownership models and a strong public economy role in the private rented sector

These are just some of the issues that the five Right2Water unions want to bring to a wider discussion.  There are more to be brought forward by the organisations and individuals here and the unions themselves.  We will establish a process to facilitate the proposals to be put forward at the June 13th conference.

Unity of Purpose

And, yes, we do admit – we have a vested interest in this process.  We want to build the broadest possible coalition behind concrete principles that goes beyond simple oppositionism.  We do not intend to write a manifesto or detailed policy proposals – that is for the activists in their respective parties, civil society groups and trade unions to do.  But in agreeing a set of shared principles we hope to provide a platform that can inform a unity of purpose.

This unity invites everyone to contribute.  It is not sectarian. It does not exclude.  It does not privilege one ideological or historical strand over another.  A democratic coalition is just that – democratic, respectful of each others’ perspective – especially when there is an honest disagreement over means and methods.

This is our goal.  We hope this is everyone’s goal.  We can today begin the work of putting together a narrative that will guide the first ever left-led government in the Republic.

It’s in our hands.

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One Response

  1. Alibaba

    May 6, 2015 12:27 pm

    This is a challenge to the system. Who would not want to respect that? That said, it seeks a ‘progressive government’, not a Left government or a Workers government. I would have preferred if this challenge had taken the hue of the proposals outlined in the previous post to ‘Build an Active, Democratic, Principled Left’ by AAA, PBP, Cllr Brendan Young amongst others. As I understand it, the fight for these political actions would not be excluded. My gut instincts tell me that should ‘shared principles’ be agreed (and as long as the platform has a campaigning complexion), all activists, groups and unions should do the following: Ally, Ally, Ally.