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Budget adjustment must not be achieved by cuts alone- Budget 2011

Social Justice Ireland has challenged the Minister for Finance, Brian Lenihan, to reject the proposal being attributed to him and his Department in recent days that all adjustments in Budget 2011 are to be met by cutting expenditure for services and infrastructure. Such an approach would condemn Ireland to a long period in recession with high unemployment and poor service provision according to this organisation which is a Social Partner in the Community and Voluntary Pillar of Social Partnership.
Social Justice Ireland fears that we are seeing a repetition of what happened last year. During 2009 the Government’s original publicly-stated commitment was to make adjustments in the Budget through a combination of tax increases and cuts in expenditure. Government went on in Budget 2010 to make all its €4bn adjustments through cuts alone. Continuing with such an approach in the coming year would be bad for the economy and bad for social services that are required in areas such as education, care of the elderly and disability services.
Social Justice Ireland believes that:  

  • Cuts in public expenditure are important but only part of the solution.
  • As Ireland’s total tax-take is one of the lowest in the EU then Ireland’s total tax-take should be raised in a fair and equitable manner while keeping Ireland a low-tax economy (i.e. below 35% of GDP which is the cut-off level provided by Eurostat for a low-tax economy).
  • Public sector reform and getting value for money remain critically important to resolving Ireland’s current series of crises.
  • The exposure of the tax-payer to the losses incurred by banks and the consequent expenditure of tax-payers’ money on rescuing these institutions should be minimised.