Wednesday, July 8th, 2015


Article Published in the Irish Examiner, July 4th 2015.

GREECE is being told to follow Ireland’s crisis solution of harsh austerity and acceptance of bank-and-bailout debt. This narrative conveniently ignores that the Irish ‘recovery’ has been built on major human rights violations and the undermining of long-term social and economic development.

There is a dark side to Ireland’s ‘success’ that requires discussion about the most effective responses to financial and fiscal crises.

The eight austerity budgets between 2008 and 2014 involved €18.5bn in public-spending cuts and €12bn in tax-raising (revenue) measures. Key public services, in particular health and housing, have been weakened as a result.

Public service staff have been reduced by 10% (37,500). Health spending has been cut by 27% since 2008, resulting in an 81% increase in the number of patients waiting on trolleys and chairs in emergency departments. One-third of all children admitted to hospital suffering with mental-health difficulties have been put in adult wards and the waiting lists for youth mental-health services have increased to 2,818 people.

Funding for local authority housing was cut from €1.3bn, in 2007, to just €83m, in 2013. This meant a loss of 25,000 social-housing units. This is a major contribution to the homelessness crisis, with 1,000 children and 500 families now living in emergency accommodation in Dublin. Because of the decision to prioritise bank recapitalisation and developer debt write-down, homeowner mortgage arrears have escalated.

There are 37,000 homeowners in mortgage arrears of over 720 days, and legal repossession notices were issued to 50,000 homeowners.

The cuts to welfare have had devastating impacts.Affected areas include lone-parent supports, child benefit, youth payments, fuel, back-to-school clothing and footwear, rent supplement, and disability and carers’ allowance.

But charges were introduced where they did not exist before — putting a further burden on lower-income households. These charges are ‘regressive’, in that they were not tailored to income level. These include water, property, school transport, prescription, A&E and chemotherapy charges. Fees have effectively been reintroduced at third-level (increasing from €1,000 to €3,000). This will have major implications for participation rates from lower-income households.

Funding for local community development, youth organisations, drugs prevention, family support, and to combat rural and urban disadvantage was disproportionally hit. Programme funding was reduced by 50%.

We are likely to see the long-term social impacts of these cuts in the further exclusion from the labour force of youths in disadvantaged areas. Issues of drugs and crime will surely worsen.

An EU report on the impact of austerity showed that the quality of secondary- and primary-level education has also been reduced, with fewer teachers, rationalisation of teacher/student support services, and the abolition of school grants.

The report links early school-leaving to austerity measures, which are highly concentrated in low-income areas. This, along with the cuts in funding to third-level, will seriously damage our education system, the core of the country’s economic development.

Hundreds of thousands of families and children have been pushed into poverty. The child-poverty rate rose from 18%, in 2008, to 29.1%, in 2013.The deprivation rate increased from 26.9%, in 2012, to 30.5%, in 2013, while for lone-parent families it has risen to 63%. Food poverty affects 600,000 (up 13.2%). Austerity has also devastated rural areas and small towns, with unemployment levels remaining much higher in the south-east.

In one of the most disturbing pieces of research into the impact of austerity, UCC and the National Suicide Research Foundation found an increase in self-harm rates of 31% in men, and 22% in women, between 2008 and 2012, while the male suicide rate is 57% higher (that’s 500 additional deaths). They cited a number of factors, including reductions in public expenditure, cuts to welfare, substantial healthcare cuts, falling house prices and personal debt.

Capital expenditure on important public infrastructure, such as hospitals, schools, roads, transport, broadband, water and wastewater was drastically reduced, by 60%, between 2008 and 2014.
Such spending on infrastructure is the bedrock of sustainable and competitive economies, and the lost decade of investment in these will leave Ireland’s economy much more vulnerable into the future.
Don’t forget, also, €17bn of our national pension reserve — which was available to fund infrastructure development and future pensions — was put into the bailout.

The commitment by Irish governments to pay all the bank- and crisis-related debt will damage our long-term social and economic development, and result in ongoing crises in health, housing, and mental health, and in rising poverty and inequality. This is because funding that should be going to these much-needed public services will, instead, be going on debt interest payments. Debt interest payments rose from €2bn (3.4% of tax revenue), in 2007, to a staggering €7.5bn, or 18% of all tax revenue, in 2014. These interest payments will enforce a form of permanent austerity in the coming decade.
Then, there is the often-forgotten issue of forced emigration. Almost 10% of Irish young people emigrated during the recession and emigration worsened as austerity intensified. It rose from 20,000, in 2009, to 50,000, in 2013. Without emigration, the unemployment rate would be 20%.

Finally, almost half of Ireland’s dramatic increase in GDP is from multinational activity, which does not take place in Ireland.

Thus, much of Ireland’s growth is based on facilitating some of the most profitable global corporations and financial services in reducing the tax they otherwise would have to pay to countries across the world. This is an unethical, unfair, and ultimately unsustainable form of economic activity.

It is clear, as highlighted by a recent assessment by the Irish Human Rights and Equality Commission, that austerity hit the most vulnerable and marginalised the hardest in Ireland. But there was, and remains, a choice about how countries such as Ireland and Greece, and the Troika, respond to debt and financial crises. Debt relief is an important option, as is taxing the wealthy, financial services or higher incomes, rather than taking it from public services, the poor and middle-income earners. The Troika and Irish governments favoured the latter and we can see the human misery and economic damage caused, as a result.

The Irish austerity-and-recovery model is being misrepresented on the international stage and should not be followed by Greece or other crises countries.

The Irish case actually points to the human and economic necessity of debt relief and alternative approaches to fiscal crises.

Rory Hearne

Article Published in the Irish Examiner, July 6th 2015.

There remains a lack of a coherent, credible, non-establishment, political alternative that can represent the public mood for change. Recent opinion polls show once again there is nothing certain about the outcome of the next general election. There remains significant political volatility and continuing anti-establishment sentiment which appears to have not yet found a new political home.

We should not be surprised by this, as there have been a number of events that point to growing numbers of ordinary people expressing their desire for social and political change. For example, the Marriage Equality referendum pointed to a citizen-led, ground up, process of positive and progressive change that goes beyond what existing politics represents. The water protests contain similar elements of a community-led, grassroots, movement of opposition.

But it wasn’t just opposition, protesters explain they are seeking a “different type” of Ireland, a more “caring Ireland” where people are prioritised over ‘the economy’ and are given “real decision making” about major policy. The water protests continue at a community level and we should not forget that this remains one of the largest social movements in Ireland since independence. But will this unprecedented popular mood and demand for fundamental change be expressed and represented in the coming general election?

The longer-term trend in the opinion polls since shows a move away from the traditional parties (Fine Gael, Fianna Fáil, Labour) who have a combined core vote (when undecided voters are included) of as low as 40%. Furthermore, the combined first preference vote of Fianna Fáil and Fine Gael in the Carlow Kilkenny byelection was just 48% — a minority of the first preference vote. To put the magnitude of the decline in support for the traditional parties in context, Fine Gael and Fianna Fáil received 68% of the vote in 2007 but just 53.4% in 2011. Labour support has collapsed. The most recent polls show the surge in support for non-traditional politics in the form of independents. But they also point to the failure of existing alternatives such as Renua, the Greens and the radical left Socialist Workers Party (People Before Profit Alliance) and the Socialist Party (Anti-Austerity Alliance) to win voters.

Part of this is also down to division among the left, for example, in the byelection, the two socialist parties, as in the European elections, stood candidates against each other.

Sinn Féin also face many challenges and appear static with around 20% of the popular vote which leaves a major gap for them to form a government. So unless some new political alternative emerges that is prepared to work alongside them in an “alternative” government, Sinn Féin will have to choose between long-term opposition or putting Fianna Fáil back into government. There remains, therefore, a lack of a coherent and credible, non-establishment, political alternative that can represent the mood for change.
Unless such an alternative emerges, the general election will result in little substantive change in policy direction. We could see a coalition government of Fine Gael and Fianna Fáil or Fine Gael, Renua, and some independents along with what remains of the Labour Party.

But there is no major economic or social policy difference between these parties. They all prioritise making Ireland “the best small country in the world in which to do business” with the result that society comes second place. They have all imposed austerity, refused to stand up to Europe for justice on our debt, privatised public services, worsened poverty and inequality, and did little to deliver political reform.

The government parties have a strong argument that they have delivered an economic recovery and are returning money into people’s pockets through the budget. And to maintain the fragile recovery people should vote for stability and not any alternatives that might jeopardise this.

However, this ignores the impact of austerity policies and the Government’s decision to focus on tax cuts rather than spending increases on areas like housing, health, and welfare.

Any serious political challenge will have to speak up for the groups still excluded from the recovery and provide positive and inclusive solutions that can achieve a fair recovery for everyone.

The grassroots approach in which the referendum campaign and the water movement have operated shows that if the general election is going to be fought using the traditional ways of doing politics in Ireland, then little will change. They suggest that something new and dramatic is required to “change the rules of the game” and empower citizens to create a new type of democratic, people-driven politics. This is what the successful new political movements of Podemos and Barcelona Together have done in recent elections in Spain. They have developed a new politics of the left that advocates human rights and democracy through citizen participation.

Any new political alternative should draw on this and lead in political reform by empowering and involving ordinary people who have never been involved in politics before through citizens’ assemblies, public forums, online input into policy development, and pioneering policies that will deliver genuine democratic reform such as citizen-initiated referendums.

Rory Hearne