Minister: the middle classes at their limit
Warning comes as shock poll shows almost a third fear losing their homes
A GOVERNMENT minister who takes pride in having his "finger on the pulse of the nation" has warned that middle-income taxpayers will not be able to bear the burden of further stealth taxes and charges that are set to be imposed in the Budget.
The intervention by Minister of State Michael Ring, who shares the Mayo constituency with the Taoiseach Enda Kenny, comes as fears soar among mortgage-holders that they may be about to lose their homes. Almost a third now worry that they may end up being repossessed.
In a week when the people of Greece rioted and the Government continued to struggle to achieve a meaningful concession from Europe, Mr Ring, a Fine Gael TD, has decided to sound the alarm.
While he says he will continue to stand "four-square" behind the Government, Mr Ring told the Sunday Independent that the slew of proposed stealth taxes and charges -- principally on property and water -- would be "the straw that breaks the camel's back".
Notwithstanding Mr Ring's declaration of loyalty, the Taoiseach will not thank his minister of State at the Department of Transport, Tourism and Sport for highlighting the concerns which are preoccupying middle Ireland this weekend.
With the deadline of its first 100 days having passed, the Government would prefer to put on a united front as it presses ahead with the implementation of a series of unpopular decisions.
But Mr Ring has clearly decided now is an opportune moment to speak out for those who, he says, are "the people worst off, the middle-income people -- middle Ireland."
His warning will resonate with the hundreds of thousands of mortgage holders throughout the country who are now living in fear that they may lose their homes.
A Sunday Independent/ Quantum Research poll has found that nearly a third of people now fear this, such is the dire financial state in which they currently find themselves.
Asked what their greatest fear was, 29 per cent said losing their home, closely followed by an inability to pay household bills, a reduction in living standards and losing their job.
But the most striking aspect of the poll was that the number who fear losing their homes has soared by 20 percentage points in just six months. When the question was last asked, in January, just nine per cent said they feared losing their homes.
The potential for a wave of mortgage defaults increased last week with the release of figures showing that arrears on residential loans rose by almost one per cent in just two months, to 7.62 per cent.
Moody's said the outlook for Irish home loans was "negative" and that unemployment would push more borrowers into arrears.
The ratings agency found that 2.38 per cent of mortgages had not been paid for 360 days or more -- up from 1.89 per cent last January and 1 per cent in April 2010.
The numbers who have not paid their mortgage in more than 360 days is significant because the Government's moratorium designed to protect homeowners who are in arrears covers a period of just 12 months.
The views of Mr Ring will therefore strike a chord with middle Ireland, which is bracing itself for the imposition in the Budget of a household-utility charge and a fee for the use of water. These are expected to be followed next year by a property tax. The imposition of such charges is clearly signalled in the memorandum of understanding agreed between the last Government and the EU-IMF.
The new Coalition, which is to honour that deal, is currently attempting to secure a reduction in the 5.8 per cent interest rate that was applied by the EU-IMF.
France and Germany have indicated a willingness to lower this interest rate by just 1 per cent -- if the Government agrees to increase the rate of corporation tax rate.
The visit on Friday of the President of the European Council, Herman van Rompuy, was designed to apply further pressure on Enda Kenny to relent on the tax issue.
So far, the Government has resisted that pressure, but as a result it is making little headway in its attempt to have the 5.8 per cent interest rate on the bailout lowered.
It was against this background last week that Finance Minister Michael Noonan raised the prospect of Ireland inflicting losses on Anglo and Irish Nationwide bondholders, an initiative which has raised alarm at EU-ECB level.
While senior figures in the Government persist with a political and diplomatic approach on these issues, TDs in both Fine Gael and Labour are becoming increasingly concerned at the repercussions of austerity measures which are being implemented to meet the requirements of the bailout deal.
Now Mr Ring has broken cover to go public on those concerns. He told the Sunday Independent: "People are working now to pay the banks and the Government. They have no other life.
"The people I am talking about here, the worst off, are the middle-income people.
"They're being squeezed for everything. Their wages have been reduced, they don't have VHI, they never used the social welfare system and they don't understand it."
His reference to the "social welfare system" is yet another indication of the resentment building up among what Mr Ring calls "middle-income earners" which has been expressed by Fine Gael deputies in recent weeks.
As these earners are repeatedly squeezed, it seems clear they believe the Government's knife should also be turned on the social welfare budget.
Mr Ring stressed that he was "anxious to put on record" that he was "not attacking social welfare recipients".
However, he added: "What I'm hearing from middle Ireland is that nobody represents them. The people that I'm talking about, middle Ireland, know all about the tax exiles and the waivers for social welfare and they're wondering is it worth their while working at all."
In a week when the Taoiseach ruled out both income tax increases and cuts of social welfare rates, Mr Ring said: "The burden has to be spread out across the board -- top, middle and bottom.
"The reality of the human stories being told to me on a day-by-day basis in my clinics indicates that people will have serious difficulties in paying these charges on the way."
As a senior member of the government, Deputy Ring also said: "I understand we are in a serious economic situation and we are a Government that has to make difficult decisions.
"It is my responsibility to support and stand four-square behind these measures as part of collective responsibility -- and I will."
But, he warned: "I am seeing people I never saw before coming into my clinics looking for help. There is no public sector/private sector divide. Self-employed, teachers, nurses, guards -- they are being hit from every angle.
"Many ordinary people will simply not be able to pay the proposed extra water charges. They're already being pushed to the pin of their collars.
"Now they are going to have to find the money to pay water charges and maybe third-level fees as well."
Mr Ring added: "There has to be fairness for those who pay. There comes a point where you can load all the taxes you want on to people -- but for many they are now at a point where they can't pay, as distinct to won't pay."