Austerity will kill recovery, unions warn
THE head of the trade union movement last night warned the Government it will "destroy" the economy and "kill off any chance of recovery" with another draconian Budget.
Irish Congress of Trade Unions (ICTU) general secretary David Begg urged Finance Minister Brian Lenihan to extend the timeframe to cut the Government's deficit to 3pc of Gross Domestic Product (GDP) from 2014 to 2017 and to focus on jobs and growth.
Mr Begg said three harsh budgets had already sucked €14.5bn out of the economy, leaving it in worse shape than when the cost-cutting policy began. At a meeting with Mr Lenihan yesterday, senior ICTU officials called for alternatives -- including increasing DIRT tax and a special levy on the wealthy -- to make savings.
They also asked the minister to renegotiate with all the bondholders of the bailed-out banks -- including Anglo Irish Bank -- forcing them to accept 10pc of the original value and saving taxpayers up to €24bn.
During a presentation of ICTU's pre-Budget submission, Mr Begg said government austerity policies could "literally destroy the Irish economy and kill off any prospects of recovery for many, many years".
Among the proposals in the ICTU pre-Budget submission were:
- A rise in the general rate of DIRT to 30pc (current level is 25pc), which would raise €75m.
- A temporary wealth tax on those with assets worth €2m or more.
- The minimum tax for high earners should be increased to 35pc and the income threshold reduced to €100,000.
- Impose a limit on earnings for pension purposes of €100,000.
- Extending the income levy to business profits.
- Using up to €6bn from the National Pension Reserve Fund to address the jobs crisis.