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