The fifth budget of the 31st Dail was clearly designed with an eye to the upcoming general election – while trumpeting headline changes like cuts to the rates of USC, free pre-school childcare and some minor increases in social welfare there was no mention in Michael Noonan’s speech of the continuing funding crisis for third level. Even on accommodation – an issue that the budget does seek to tackle – the measures announced will not take effect for years. It would be too easy to label this budget another traditional pre-election giveaway.
Rather, it clearly reflects the vested interests and political priorities of this government: low taxation, targeted government support and inaction on the major crisis’s facing the most vulnerable. It’s a budget focused upon key constituencies the government hopes will support them come the election: middle income families, pensioners and those in high-income brackets. There is no other way to explain new measures, like a sizeable reduction Capital Gains Tax for the disposal of businesses from 33% to 20% and a significant reduction in commercial vehicle motor tax.
The tax breaks seem very incongruous when the government essentially ignores the years of cuts inflicted on students, the poor and unemployed. We can tell as much from what isn’t in the budget as what is, with Jobseekers Allowance for those under 25 remaining at €100 a week, rising to €144 at 25 and the full rate of €188 at 26. This is despite heavy lobbying from youth organisations, such as Labour Youth who unsuccessfully pushed for a reversal of this policy. The government continues to ignore the continuing decline of third level education as student numbers rise in tandem with stagnant funding.
Even if funding for higher education institutions manages to rise above €1bn euro again the crisis will continue to worsen without far more radical action. The main good news for students is the €3 million euro announced for the student assistant fund, which should be welcomed – but coming in the wake of four years of cuts it’s questionable how much of an impact this increase will have. As explained by the president of USI, Kevin Donoghue: “Education is an investment, not expenditure.”
Students continue to struggle with the crippling accommodation crisis, particularly in Dublin. Emerging from the lack of planning and development the huge rises in rents over the past four years have left thousands of students unable to find affordable accommodation. Trinity has been particularly affected with city centre accommodation becoming ruinously expensive.
It’s estimated that at least 15,000 to 30,000 new apartments are needed immediately to tackle the housing crisis and make accommodation affordable for all income brackets. There are other alternatives: rent controls, immediately freeing up NAMA controlled housing or emergency government subsidies. None of these have been pursued with the government instead opting for the delayed introduction of NAMA housing up to 2020, capital expenditure and new public-private partnerships to resolve the problem. These measures that won’t produce a new housing for years, leaving students low income families to fend for themselves.
The government have increased funding to tackle homelessness by 20% while ignoring the root causes of this homelessness. When considering the failure to introduce rent controls, it’s impossible to ignore the 1 in 10 TD’s who are landlords, a high proportion of whom belong to Fine Gael and Fianna Fail. Having been elected on a mandate of political reform, the infamous ‘Democratic Revolution’, Irish politics seem once again beholden to vested interests.
There is nothing more emblematic of these vested interests than the new 6.25% corporation tax for eligible ‘Knowledge Development Box’ companies, a cut from the already extremely low 12.5% corporation tax. Considering how little tax multinationals already pay due to creative accounting and outright tax avoidance this policy seems primarily aimed maintaining the presence of these multinationals. Although a handful of the large companies, such as Google and Microsoft, employ sizeable numbers many have tiny staffs and ‘base’ themselves in Ireland only to avail of reduced tax.
There presence alone is desirable for the government when it comes to economic figures, which in the case of Ireland are often severely divorced from the real economy. This has been a continuous pattern during this government: the usage of economic tools to massage GDP and unemployment figures. While the government promotes the country to international tech and finance companies, those under 25 are left with few options.
Reduced JobSeekers Allowance – reduced further if one lives at home (a common result of the housing crisis) – with the prospect of JobBridge, a government project whose entire purpose seems geared to reducing the live register. If one is lucky enough to be in employment, the budget has increased the minimum wage by 50 cent, but that still leaves it well short of the living wage of €11.50 and just about in line with inflation.
The budget will not surprise anyone; the government is making it’s last attempt to secure support prior to the general election and with huge and continuing youth emigration coupled with historically low voter turnout among under 25’s there simply wasn’t much incentive to tackle the current issues facing students. However, given record voter registration in the run up to Marriage Equality referendum perhaps other political parties will attempt to tackle the issues the government has ignored in the coming months as the general election looms.