The coalition government of Fianna Fáil, Fine Gael and the Green Party has announced its 2023 budget. This is taking place in a period of growing inflation, rising energy costs, and falling consumer confidence and spending.
The increase in social welfare payments comes nowhere near meeting the rate of inflation. The €12 increase in social welfare will not keep up with inflation; to do that it would have to be more like a €25 increase.
The €500 tax rebate on rent will be swallowed up with rising rents. Absolutely no action in tackling the root causes of rents being as high as they are; no rent control or rent caps: business as usual.
In real terms, this will mean that during 2022 and 23 inflation will run at 16¼ per cent. Incomes will have to rise by this amount over that time just to stand still. They simply do not meet people’s needs.
Real incomes will fall, interest rates are rising, while at the same time this state’s main trading blocs are stagnating and will most probably fall into recession.
NATO’s proxy war with Russia in Ukraine will have a long-term economic impact on the economies of the member-states of the European Union. Germany, the powerhouse of the EU, is being affected most by this aggressive strategy of domination and control of markets and resources now in full force by the United States.
The Government is projecting that gross national income will grow by 0.4 per cent in 2023 and that domestic demand will increase only by 1.2 per cent while projecting inflation to be about 7 per cent.
Rising energy costs resulting from both the proxy war against Russia and massive profit-taking by energy monopolies will probably drive the Irish economy, as well as other economies within the EU, into recession.
Some people are predicting a 5 per cent loss of national income and output. It could be more, as this state’s economy is over-reliant on globally traded services and goods, while its revenue is dependent on the creaming of “imperial rent” from transnational corporations declaring and paying their minimum taxes in this state.
The same applies to the miserable increase in the minimum wage. This will only drive tens of thousands of low-paid workers into greater poverty and increase the number of the working poor. They will then have to rely upon family income supplement to live, increasing the state’s contribution in subsidising low-wage and super-exploitation.
This budget has been designed to protect the income of the professional classes and high-paid workers at the expense of the bulk of workers. The tax cuts benefit only the better off. One-off payments covering energy costs and child benefit in the main will end up in the pockets of the private energy corporations and those private providers of child care.
Part-time and low-paid workers will be the big losers from this pro-wealthy budget. The standard rate cut-off point for income tax was increased by 8.7 per cent and in effect indexed to inflation. Most if not all the increases in spending on health tend to be swallowed up and are in fact a further source of wealth for the private and corporate medical sector, private consultants, and wealthy GPs.
This budget will do very little for working people. It will further accentuate the deep inequality within this corrupt state. It will certainly do little in the struggle to decarbonise and to save our planet from destruction.
The increase in spending on the military is only a further indication that the state is committed to the global war and domination strategies of NATO and the EU. It is fully wedded to, and dependent on, imperialism.
Budgets in our society are for feeding the illusion that governments stand above the fray, are referees in the struggle between working people to win a greater share of the wealth they produce and those who own and control that wealth.
Governments are not bystanders in the day-to-day struggles to survive: they are for serving, protecting and ensuring the reproduction of capital, for protecting privilege and the power of the owners of capital.