DECIDING TO VOTE against the Budget tonight was not a decision that I took lightly. It is not easy to take a position independent of my colleagues in the Labour Party. However I believe that this budget is fundamentally flawed for four main reasons:

• It is unjust – it hits people on low and average incomes disproportionately
• It damages our prospects of economic recovery
• Instead of creating jobs it will lead to higher levels of unemployment
• It attacks the marginalised, the sick, the elderly and young people with disabilities

I will explain these in further detail:

Unjust Budget
The household charge combined with the increase in VAT is deeply regressive, unfair and ultimately counterproductive. People on low and average incomes will be disproportionately affected while the wealthy benefit from flat rate taxation levied in this manner.

Damages our Prospects of Recovery
The budget by hitting people on low and average incomes hinders our prospects for economic recovery. Because people on low incomes spend, rather than save or invest, these measures take money directly out of the local economy and hit jobs in the already hard pressed retail sector.

There is an alternative to austerity which I have outlined in some detail over the last ten days.  TASC, Social Justice Ireland and ICTU have put forward well-researched proposals that can raise billions from the wealthy. I am disappointed that the Government has not taken these proposals on board. Irish concentration of wealth is one of the highest in the EU-15.  28 per cent of all wealth – housing and financial wealth – is owned by the top 1 per cent of adults. The Government should target this wealth.

Increases Unemployment Directly
The Government decision to further cut the number of jobs is the last thing we need with soaring levels of unemployment. Specifically they have decided to cut 7,500 jobs from the economy next year, due to cuts in capital spending, and to reduce public sector employment by a further 6,000.

Attacks the young, the sick and the marginalised
The decision to cut child benefit for the 3rd and 4th child is a very clear breach of the pledge by the Labour Party in the last general election to protect this payment from cuts. Larger families are more at risk from poverty so this is an unjust decision.

Other measures that are particularly regressive include:

• The cuts to the fuel allowance and back to school allowance which will hit vulnerable old and young people.
• Cuts of €543 million from health which will have a devastating effect.
• The decision to increase public transport fares which will again hit people on low and average incomes disproportionately hard.
• The 47% cut in disability allowance for young people with disabilities who cannot find work.

I remain committed to the values and principles of the Irish Labour Party. I put forward a number of constructive proposals in advance of the budget that outlined how the Government could increase revenues to narrow the budget deficit as required. I am disappointed that these were not implemented.

I am not prepared to support measures which damage our economic recovery while attacking the weak, the sick, the marginalised and the vulnerable.

Patrick Nulty is a Labour TD for Dublin West

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