pre-budget leaflet
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Pre-Budget Leaflet for Labout PartyTRANSCRIPT
MichaelMcCarthy TD
FIGHTING FOROUR ECONOMICSOVEREIGNTY
0612
YOUR LOCALLABOUR TEAM
WORKING FOR YOU
A MESSAGE FROM EAMON GILMORE, TÁNAISTENext month, the government will be announcing both next year’s spendingestimates and next year’s Budget. Let’s be clear about one thing. Thisgovernment will be making decisions that will be tough and painful. Thiscountry finds itself in the midst of an economic and financial crisis, and the factof the matter is that there is no easy way out of it. In making these decisions,the government has often been faced with choosing between the unpalatableand the unacceptable, but make the decisions we must.
We have already had to take decisions that none of us ever thought we wouldhave to make, but progress is being made. Our international reputation hasvastly improved. Our economy is growing, exports are strong and the publicfinances have stabilised.
In addition, we have made huge inroads in renegotiating the terms of thebailout deal with the Troika. There is more work to be done, but we will stick atit because we believe that we can continue to make more progress. The lastgovernment threw away our national independence. This government is tryingto win it back in the fairest possible way. Unfortunately it will mean a difficultfew years for every citizen in the country.
I believe that if we really want to lay strong foundations for a long-termrecovery we need to take decisive steps now. Yes, we are asking for significantsacrifices, but the prize on offer - the recovery of Ireland, is huge.
I thank you for your continued support.
Yours sincerely,
Eamon Gilmore Tánaiste and Leader of the Labour Party [email protected]
Follow Michael on and
Please feel free to contact me on this or any other issue.
Michael McCarthy TD
Cllr Gearóid Buckley085 2438330 [email protected]
Constituency Office:Market Square, Dunmanway, Co. CorkPhone: 023 8855705
Dáil Office: 01 618 3844E-mail: [email protected]:www.michaelmccarthy.ie
Cllr Tony Cierans087 6387792 [email protected]
Cllr Frank Fahy087 [email protected]
Cllr Brendan Leahy086 [email protected]
Cllr Tomas O'Brien087 [email protected]
Cllr Aidan Pendlebury085 [email protected]
Listen to Michael’s weeklypodcast onwww.michaelmccarthy.ie
MCCARTHY MICHAEL PRE BUDGET LEAFLET A3 1514_Budget leaflet 09 28/11/2011 11:26 Page 1
l Reduced the interest rate on our Troika loans to a value ofalmost €10 billion, in addition to spreading out therepayment over an additional timeframe.
l Renegotiated the EU/IMF Memorandum ofUnderstanding as entered into by the previousgovernment which resulted in the Jobs Initiative.
l Restoration of Minimum wage.
l Reduced the pay of the Taoiseach and Ministers.
l Introduced new pay ceilings for senior public servants.
l Published legislation to significantly reduce future PublicSector pensions costs.
l Expected savings of €20 million by rationalising 33quangos, with a further 15 quangos to be rationalised in2012.
l Plans to reduce the size of the public service which whendelivered will save over €2.5 billion, or 15% since 2008.
l Major infrastructure programme providing for the go-ahead of the National Children’s Hospital and 220schools.
l Commencement of Primary Health Care reform.
l Our national debt is rising by approximately €900 per second, €75million a day.
l We are required to borrow in excess of €350 million a week from theEU/IMF to pay the day to day expenses of the State, ie payingteachers, nurses, guards, pensioners etc.
l It is costing €70.5 billion to run the country. €51.5 billion is coming inthrough tax returns.
l €110 billion is currently being made available from the ECB to ourbanks at a low interest rate.
l Based on current figures, the EU/IMF ‘loan’ requires us to save €3.8billion in the forthcoming budget, along with further difficult budgetsuntil 2015. These targets are legally binding.
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KEY LABOURACHIEVEMENTS INGOVERNMENT
IRELAND’S ECONOMICSITUATION – THE REALITY
Irish Government Spending 2011: €70,500,000,000Irish Government Tax Revenue 2011: €51,500,000,000Government overspending this year: €19,000,000,000Expected Total Debt at end of this year: €164,000,000,000Proposed Budget Cuts to overspending next year: €3,800,000,000
WHO ARE THE TROIKA?Our current management of our affairs is subject to oversight by the troika of theEuropean Commission, the European Central Bank and the International Monetary
Fund.
WHY ARE WE BORROWING MONEY FROM THE TROIKA?We want to re-enter the markets to borrow money in our own right thereby
regaining our national sovereignty. The Troika are lending the State €85 billion in theprogramme.
WHY CAN’T WE ‘BURN’ THE BONDHOLDERS?We don’t believe that the State should pay bondholders in Anglo Irish as it is a failedentity. However, this could not be done without the agreement of the Troika, whichwe did not get. However, there is no question of additional resources over and abovethat committed by the previous government. “Burn bondholders and run the risk of
the house catching fire…”
WHY WAS ANGLO BAILED OUT?That is a question best answered by Fianna Fáil. Anglo was guaranteed by the
previous Government because it believed it was a bank of systemic importance. TheLabour Party alone voted against the Blanket Bank Guarantee in 2008.
WHAT ARE PROMISSORY NOTES?A promissory note is a ‘loan of last resort’, effectively an ‘IOU’, meaning the debt isdeferred. The promissory notes were signed off by FF but they deferred the interestpayment for the first two years, leaving this government to inherit that problem
as well.
WHAT IS THE TOTAL COST OF THE PROMISSORY NOTES?Assuming the current level of interest, the bonds will cost the state approximately
€47.4 billion.
WHAT IS THE ON-GOING STRATEGY FROM GOVERNMENT ON PROMISSORY NOTES?
A key goal is to seek reduced interest rates on the promissory notes which wouldsave billions.
WHY IS A GREEK ‘HAIRCUT’ IS NOT AN OPTION FOR IRELAND?There is no such thing as a painless haircut. Greek’s debt ratio is higher thanIreland’s and the extremely harsh austerity measures have resulted in monthly
pensions above €1,000 to be cut by 20%; 30,000 civil servants have been suspendedon partial pay; tax free threshold for income tax lowered from €12,000 to €5,000.
ARE THERE ARE POSITIVES FOR THE IRISH ECONOMY?Yes. The economy is growing again. GDP increased in the first half of this year. Ourexports are strong – up 4% in the first eight months of 2011; the public finances
have stabilised and the budget deficit has started to decline; investor confidence hasgrown and our international reputation has improved.
This government is determined to work hard to regain our economic sovereigntyand create jobs for our people. We are taking a long-term approach which will
have a significant, positive effect on our national debt.
LET’S PRETEND IT’S AHOUSEHOLDBUDGET
Annual household spending: €70,500Annual family income: €51,500New debt on the credit card this year: €19,000Expected balance on credit card at year end: €164,000Proposed cuts to household spending next year: €3,800
Due to the disastrous mismanagementof our economy by the previousgovernment, we are no longer in controlof our own financial affairs. The realityof the situation our country has beenput in is as follows:
IRELAND’S HARSH ECONOMIC SITUATION
STRAIGHT TALKQUESTIONS AND ANSWERS
ON THE ECONOMY
MCCARTHY MICHAEL PRE BUDGET LEAFLET A3 1514_Budget leaflet 09 28/11/2011 11:26 Page 2