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Sinn Féin Budget proposals… November 20, 2012

Posted by WorldbyStorm in Economy, Irish Politics, The Left.
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Interesting to see SF will be putting forward today (at least I presume so, though given the events of the last week…) some fairly radical – at least in the contemporary Irish political and economic context – proposals for the 2013 Budget. Now it’s probably important to note that these consolidate proposals they’ve made since the beginning of the crisis, but as noted in the Sunday Business Post at the weekend:

The party proposes raising €800 million by imposing a 1 per cent tax on an individual’s net wealth over €1 million. The tax would not be levied on 20 per cent of the value of the family home, pension pots, business assets or agricultural land.
Sinn Féin also favours a third rate of income tax of 48 per cent on income above €100,000 per year. It said that this could raise €365 million. Under the plan, a person earning €136,000 per annum would pay an additional €2,520 a year in tax.

In fact many of their proposals grasp the nettle of increasing taxation, both in terms of income tax, but also capital gains tax and capital acquisitions and increased PRSI levels – which as they note are ‘amongst the lowest in Europe’.

It’s worth noting too their line on private pensions:

The party proposes raising almost €1 billion of this by reducing pension tax reliefs to a standard rate of 20 per cent. In addition, all tax reliefs would have “sunset clauses”, whereby they would be reviewed in the future and possibly reduced further.
“The reality is that there are tax reliefs that benefit high income earners, and the debate needs to be about effective tax rates,” said Pearse Doherty, Sinn Féin’s finance spokesman.
“It is our view that, while the state is struggling to pay state pensions, tax reliefs cannot be used to the benefit of those who can afford to save for higher pensions.”
The current earning cap for private pensions of €115,000 per annum would be reduced to €75,000, while the taxable ceilings for special pension vehicles would be increased.

This is very interesting because that aspect of pensions is often left out of discussions as regards the fact that private pensions tend, in the main, though not in all cases, to be provided for somewhat better off private sector workers.

Cautious, yesish overall, but cleverly pitched. Nothing too radical – albeit far too radical for our current Government, but nonetheless making a very clear statement. It will be very telling to see how these proposals fare in future polling data.

That they’ve also been costed by ‘relevant government departments’ gives them a degree of credibility. As is their ‘acceptance’ of the €3.5bn ‘budget adjustment’. That’s grand, but what of next years budget and the year after? How, one wonders, will that be dealt with? Perhaps that question is answered in the actual document.

Yet despite that caveat at the same time it is heartening that a party of SF’s size would make the case for increased taxation over expenditure cuts – something that others appear to have long abandoned.

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1. irishelectionliterature - November 20, 2012

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2. LeftAtTheCross - November 20, 2012

It’s mild enough but it’s generally in the right direction, and it does pose the question why such “motherhood and applie pie” type measures are not acceptable to the elites, it does pose the question of class politics, albeit in such a watered down form that one would have to be actively looking for it in order to find it. Which isn’t necessarily a bad tactical approach of course, it’s just a question of emphasis.

I had a couple of chuckles during the video all the same, the reference to clamping down on “black market activity” couldn’t possibly be a attempt to cover their behinds in relation to the fuel smuggling activities of their previous comrades in arms in the border counties in particular, and the reference to closing down loopholes in the “oireachtas gravy train” somehow omitted to specifically mention printer ink cartridges. Growing pains perhaps.

Like all the pre-Budget statements and counter proposals that come out this time of year, there’s much to like. It’s a real pity that instead of the plethora of competing alternatives there isn’t one single heavyweight alternative which all the opposition political parties and civil society groups could put together. There is quite an overlap in immediate demands between them after all, although far from complete of course. A lack of focus and oppositional momentum, and a reasonable accusation of cynical and competitive posturing, are some of the downside of the current fragmentation.

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3. Glen Clifford - November 20, 2012

People Before Profit Alternative Budget

http://www.swp.ie/content/people-profit-alternative-budget

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Jolly Red Giant - November 20, 2012

This one is even more watered down than last year –
‘adopt the Norwegian model for gas and oil exploration’ – for f*ck sake – all natural resources should be brought into public ownership.
waterdown of tax proposals too – a 2% wealth tax and increasing corpo tax to 15% – we wouldn’t want to overtax those poor rich people, would we?

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Glen Clifford - November 20, 2012

Well they do say: “the abolition of the current licensing regime and the re-nationalisation of all oil and gas reserves, potential and actual”

I’m not sure about their figures for creating 200,000 jobs by investing €10 billion over 2 years though.

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Jolly Red Giant - November 20, 2012

The point I was making – in case you missed it the first time around – if that these proposals from the PBPA are a major watering down of the proposals put forward by the ULA last year when the ULA budget submission called for a 5% wealth tax and for taking all natural resources into public ownership.

One further point – to suggest that the left should engage in some sort of watered-down measure like the Norwegian model (that you yourself suggest no one would know anything about) while rejecting the necessary step of taking natural resources into democratic public ownership because it is not the populist thing to do – demonstrates a shift to the right by any socialist who argues such a position.

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LeftAtTheCross - November 20, 2012

“that these proposals from the PBPA are a major watering down of the proposals put forward by the ULA last year”

But this isn’t a ULA proposal, it’s a PBPA proposal. Would you like to expand on why the ULA hasn’t managed to agree a common proposal between its constituent parties this year?

“demonstrates a shift to the right”

Is that some sort of hex or something that is used in SP circles to condemn those who fail to see the error of their ways?

There’s more than one acceptable tactical position in these things. I’ll make the point again that I made above, it’s a question of emphasis and of connecting into the mainstream of public discourse. The latter is unfortunately not ready to discuss nationalisation of the commanding heights etc. at this stage, therefore the logic of the PBPA call for more attainable demands is to be welcomed. By attainable I mean that the Norwegian example is something that already exists in the context of a western liberal democracy. Clearly if such a demand could be satisfied then there’s no reason to stop there, but from where we’re at now the first stage of partial socialisation of the oil & gas resources is a worthy goal.

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Jolly Red Giant - November 20, 2012

And I made the point that the PBPA submission this year is not as radical as the ULA one last year. Maybe you should ask the SWP their reasoning behind it.

As for a shift to the right – proposing some corporate part-state owned (operating on a for-profit basis) part-private owned and operated system for exploiting natural resuorces is a significant shift to the right from a proposal for all natural resources to be taken into democratic public ownership and used for the benefit of society rather than the profit of the few.

The suggestion that this middle of the road nonsense is somehow more tactically nuanced than calling for public ownership is rubbish. Not talking about public ownership because of some perceived notion that ‘the mainstream of public discourse’ is not ready for it is laughable. Failing to bring public ownership into the debate will result in ‘the mainstream of public discourse’ never being ready for it.

The Norwegian model has nothing to do with the ‘partial socialisation’ of resources – no more than the socialisation of bank debts has resulted in the ‘partial socialisation’ of the financial system.

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LeftAtTheCross - November 20, 2012

Rubbish, nonsense, laughable…fair enough JRG, you’re clearly nor one for allowing differences of opinion in a discussion. Off you go then and convince the masses that an immediate flip to 100% public ownership is the only acceptable solution. Good luck with that now.

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Jolly Red Giant - November 20, 2012

LATC – so after ignoring the fact that the so-called Norwegian model is a significant shift to the right from the public ownership of natural resources you simply dismiss the argument of the necessity of taking natural resources into public ownership. It has nothing to do with ‘immediate flips’ and everything to do with what is necessary.

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LeftAtTheCross - November 20, 2012

“what is necessary”

A subjective opinion, nothing more.

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LeftAtTheCross - November 20, 2012

JRG, if you ask people should the oil & gas resources be taken into public ownership you’ll probably find that a certain percentage of those asked would think that’s too extreme, whereas if you ask them should the Norwegian model be followed they might think that sounds more acceptable, even without knowing the details. If you check out the facts on the Norwegian model is you find that the state holding company Petoro owns 24% of the oil reserves and 41.6% of the natural gas reserves directly, while commercial operators pay taxation at 78% on income. Now it falls short of complete public ownership but it’s quite an improvement on the situation operating in this state. So let’s accentuate the positives instead of dumping on your fraternal comrades within the ULA, no?

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Jolly Red Giant - November 20, 2012

I hate the way wordpress do their reply stuff – I mess up where the replies should go all the time.

My comments were in response to LATC.

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sonofstan - November 20, 2012

if you ask people should the oil & gas resources be taken into public ownership you’ll probably find that a certain percentage of those asked would think that’s too extreme, whereas if you ask them should the Norwegian model be followed they might think that sounds more acceptable, even without knowing the details.

I dunno LATC: this is one of the issues I hear a fair bit of talk about at work, and, partly thanks to Rossport, i reckon there is a feeling among a significant portion of the population that natural resources such as gas and oil are ‘ours’ and should be kept in public ownership.

It’s a fault of the left to try and second guess the possible reaction to policies it feels might be too radical – better sometimes just to say it. No matter what we say, the MSM will rubbish it, but a clear message will be heard over the chatter, whereas a confused one will be drowned out.

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LeftAtTheCross - November 20, 2012

But that’s the point SoS, the Left has been saying it. You can go back to the 70s and OSF’s publication “The Great Oil & Gas Robbery: A Case Study of Monopoly Capital”, and ever since. The point is that the message hasn’t been received, not that it hasn’t been transmitted. I’m not saying that the argument for public ownership is flawed, far from it, only that the public at large haven’t been convinced yet, clearly by far from impartial players in the media of course to a large extent. I’m not one to praise the SWP often but in this particular case I think their angle is more convincing because of its apparent lack of radicalism. I mean, who doesn’t like Norway? My own mother would probably agree with RBB’s angle on it if he quotes Norway, but if you mention Venezuela and the nationalisation of the oil industry she’d switch off.

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RosencrantzisDead - November 20, 2012

I do not know, Stan. I think more could be done to improve the rhetoric used by left parties in Ireland. ‘Norwegian model’ sounds credible and has connotations of expertise. It also gives the impression that someone has done some research on this issue. This is the sort of thing that left parties need since they suffer from a lack of credibility on these issues.

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WorldbyStorm - November 20, 2012

On the other hand the SP, the WP and others have argued for nationalisation for years and there’s been no clear shift in support towards them, so it may be that there’s an element of what you say and an element of what LATC notes as well both working in tandem.

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que - November 20, 2012

The PBPA alternative budget link lists a 1500 word article or 4 A4 pages. Thats the equivalent of a first year essay.

A small bit more detail would not go amiss. The focus is on whether they are watered down but sure whats the worry about whether they are or arent when a more pure version would just be as inadequately detailed.

Water it up or down but go beyond 1500 words when explaining how the country can get beyond this crisis.

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4. Red Hand - November 20, 2012

We really do live in fantasy world when a thread on the SF proposals- which mainstream opinion will consider miles too far left, is already turning into an attack on People before profit for being too moderate.

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LeftAtTheCross - November 20, 2012

Yep.

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Jolly Red Giant - November 20, 2012

At first reading the Sinn Fein proposals are also a watering down of proposals of last year which was a watering down of proposals the previous year.

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5. doctorfive - November 20, 2012

Are SF still using that BOI report in their calculations?

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6. Tomboktu - November 20, 2012

If you’re interested in the SF proposal, then you’ll probably be interested in Claiming Our Future’s document on ‘Plan B’, where they present a table summarising five alternatives (PDF here) from TASC, NERI, ICTU, UNITE and Social Justice Ireland.

Michael Taft has a post about them on his most excellent blog, Notes on the Front, today.

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7. Bartley - November 20, 2012

You just gotta love the Shinners, the worked example brought a smile to my face …

Maureen is a widow and has a house valued at €500,000. She has annual net income of €60,000. The business her husband left her is valued at €600,000, including turnover and property. Maureen on paper has a worth of €1.16million in any given year, but the wealth tax excludes her business and 20% of her family home. This means that Maureen’s wealth for the purposes of this tax amounts to €460,000 and therefore she is not affected by the wealth tax.

Well I, for one, am totally reassured that this poor … cough! … widow-woman is left untouched by their proposals.

She may be in the top 1%, but she’s a widow! And she’s called Maureen! What\’s not to like in that?

But that swanky Ciaran in example B, he should be soaked for all he’s worth!

The exclusion of very specific types of wealth (100% of pension pots & agricultural land) says more about SF than the rest of their proposals put together.

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