Pressure continues to mount against the Republic’s coalition administration as Labor Party backbenchers worry about leaks that child benefit payments will be cut by €10 a month in the budget next month.
That would be the third child benefit cut in two years.
Although Cabinet ministers emphasize that reports about the cuts to child benefits are at this stage speculation, anti-poverty campaigners believe the proposal will be approved within days before the December 6 budget.
Already, Finance Minister Michael Noonan has conceded VAT will rise by 2% to 23%, putting the Republic’s rates 3% above Britain’s and certain to cause a Christmas rush to shops across the border in Northern Ireland.
This comes on top of a report revealing that house prices in Dublin have lost half their value in the last four years and in the rest of the country by more than 40%. They are predicted to keep on dipping in the next year because of unemployment, a lack of mortgage finance and economic uncertainty.
The Labor Party has been accused of breaking a pre-election pledge not to cut child benefit. Minister for Social Protection Joan Burton, whose department supervises child benefit payments, is a member of the Labor Party.
There is growing fury among Labor backbenchers at the leaked proposals.
Fianna Fail on Monday posted a video on its website of Labor leader Eamon Gilmore promising his party would not agree to any further cuts in the family allowance in the run-up to last February’s general election.
Fianna Fail social protection spokesman Barry Cowen called on Gilmore to clarify if this remains the party’s position.
Cowen, younger brother of former Taoiseach (Prime Minister) Brian Cowen, said, “The reports that Minister Joan Burton is to cut child benefit payments by at least €10 a month have come as a major shock and worry to families across the country.
“Just nine months ago, Labor could not have been clearer in their promises to them that a vote for their party was a vote to protect child benefit.”
Irish leader Enda Kenny’s popularity on the up and up
Outgoing chief executive of the Children’s Rights Alliance, Senator Jillian Van Turnhout said the measure, coming on the back of cuts in child benefit in the previous two budgets, would push many families on low-middle incomes into poverty.
“Child poverty is unacceptable and child benefit has been proven as a universal measure to ensure that families have a safety net,” she said.
Orla O’Connor of the National Women’s Council of Ireland described the proposal as “deplorable.”
She said €140 per month was a meager sum when it came to meeting the cost of raising children, including food, clothing, education and childcare.
Transport Minister Leo Varadkar, of Fine Gael, admitted there is a risk that some government backbenchers could “jump ship” after the budget measures are finalized.
Varadkar, on his way into Tuesday’s Cabinet meeting, said there was a chance the government “could lose people along the way.”
But he emphasized that everyone in government, including backbenchers, should understand that politics was about leading people out of the current mess and restoring Ireland’s sovereignty in the short-term and its prosperity in the long-term.
Taoiseach (Prime Minister) Enda Kenny, while insisting that nothing was decided yet for the budget, said preparations were difficult.
“When you are taking €3.8 billion out of the economy, it is unpalatable and difficult,” he said.
It’s just a year since Ireland was bailed out by the International Monetary Fund. European Central Bank member Dr. Jurgen Stark told a Dublin conference this week that Ireland was a “role model” for other countries under the bailout program.
He commended Ireland’s adherence to austerity measures at the Institute of International and European Affairs in Dublin.
He said, “It is feasible, it’s possible to implement progress as long as there is support from the society and consensus across political parties.”
The country’s household debt stood at 120.8% between the years 1999 and 2010, compared to a European average of 65.8%, he said. A deficit in one country was due to a surplus in the current account of another country.
At a first anniversary protest against the bailout -- a demo organized by Sinn Fein -- a Garda (policeman) sustained minor injuries in Dublin.
The officer was hit in the face and sustained a bloodied lip with a prop briefcase full of fake money that was being waved in the air by a protester mimicking the European bailout bosses.
Sinn Fein plans other protests against Kenny and Gilmore for their support for the IMF in the run-up to budget day on December 6.