DCTU

Dublin Council of Trade Unions

Reason 1: Spending Cuts are a Government Choice

It is still sometimes claimed that the Troika requires the Government to make spending cuts. This is not the case.  EU and IMF officials have said this time and time again since they came to town.  More importantly, the Government has admitted this is the case.  The Minister for Finance explained it this way:

They (the Troika) actually don’t look at the individual measure apart from establishing that it’s robust.  In other words, if you say that this is going to raise a million it actually does raise a million.  But if you want to substitute it for another tax measure they’re equally happy as long as it raises a million as well.  What they don’t want is some kind of quasi-fictional figure where you make a claim that a particular measure is going to reduce expenditure by a set amount or raise revenue by a set amount, and then when they examine it it’s a fudgy target.  We haven’t gone into absolute detail (about the budgetary proposals) because they don’t do that level of scrutiny . . . We show them the general approach but they don’t get into detail .[1]

The Troika doesn’t dictate the ‘how’; it merely requires that the goal is reached – the goal of deficit reduction.

So the Government could introduce a budget made up wholly of spending cuts.  Or it could introduce a budget made up wholly of tax increases.  Or a budget with a mixture of spending cuts and tax increases.   It’s up to the Government.

So why do some Government Ministers and backbench TDs still claim that the Troika requires that health services or education or social protection have to be cut?  Because it’s convenient to blame a ‘higher power’ for unpopular and socially unjust policies.  But the fact is that the Government, itself, elects to implement these policies – they are not forced to do so by anyone.

Therefore, Ministers have a choice.  They can introduce a wealth tax to raise €400 to €500 million; or it can cut social protection rates by that same amount.  It can reduce tax reliefs for higher income groups or it can cut front-line health services.  It can continue to give reliefs on property investments (those reliefs that ruined the economy) or it can cut education services.

That’s the point of a budget – it is a budget of choices.

Why should we march?  To demand that the Government make the right choices – put the burden of the crisis on those who can afford to pay.


[1] RTE, News At One, November 27th 2011:  http://www.rte.ie/news/av/2011/1127/thisweek.html#

Download PDF here: Reason 1 Choices

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