In a remarkable turnaround today, Brian Lenihan delivered what he termed the “Children’s Budget” and made a startling apology for the disastrous mess his party had made of the country’s economy.
“The only honourable thing for us to do” he said, “is to acknowledge that it is our fault. We are sorry. It is our encouragement of the property sector, over the past ten years in particular, that created the catastrophic downturn we now face. Our foolish tax-cutting and abandonment of domestic rates, for populist reasons, has left us without enough income to cover even the bare essentials necessary to keep a civilized Western society functioning. We allowed the banks to gamble with our money to line their own pockets, and they failed in their primary purpose: to keep our money safe.
“We will immediately nationalize all Irish banks. Their sole purpose from now on will be to safeguard our savings and invest in indigenous businesses and education. All banks in Ireland are to become non-profit corporations. We no longer recognise banking to be an industry that requires any component of wild speculation, and with that in mind we are introducing new laws which curtail the services that banks can offer, to savings and loans, and prudential investments in businesses. No more can the hard-earned cash of our people be used to fund anything but the most sensible and careful investments. Any institution that wishes to engage in risky financial market speculation shall have the same status as betting shops and casinos, and shall not be permitted to accept deposits.”
“We are abandoning all mortgage tax relief. The European model is one we will adopt, where most people are happy to rent. Those who suffer because their mortgage relief has been abolished will benefit from a fund to enable owners (of one property only) to re-mortgage over a longer, interest free period. Property owners will be subject to strict regulation, imposing high standards in insulation and tenant protection. It is nonsense that taxpayer’s money should go to further the acquisition of private property. Those individuals or corporations that own more than three properties will be required to offer their tenants the opportunity to part-own their homes. Owning property in Ireland will no longer be the cash cow it used to be, it will come with heavy responsibilities. In particular, a new, fast-track transparent system of fair rent review will be introduced, where property owners will have to defend the rents they are charging and demonstrate how they are spending the rental income on the properties.”
“Social housing that is occupied by tenants whose earnings are above the average wage will be required to obtain a mortgage, partial or full, on their home. The money raised from these purchases will be invested in new housing for those in need.”
“We have decided to embark on a radical 5-year plan to invest in our children’s welfare, and to protect the vulnerable in our society. Those who are working and in good health will have to tighten our belts and pay for this. We envisage that, in five years, the world recession will be over, and by that time, we will have a new generation ready to enter the workplace who are well-educated and well-resourced, and ready to take on the challenges of ensuring that Ireland is self-sufficient and content with itself in the 21st Century”
“We are abolishing the notion of unemployment benefit. Those who do not work will, like everyone else, receive a minimum income that is not subject to tax. They will be expected to take part in a National Community Service programme to build schools, community centres, green power plants, and essential infrastructure projects, for the next five years. Those who wish to attend third-level education during this recession will benefit from interest-free loans from the banks. We firmly believe that the most effective way of riding out a recession is in college or apprenticeship. When our crisis is over, the government may choose to reinstate more traditional social welfare payment, but until that time, only those who are infirm or disabled or full-time carers will be exempt from the requirement to take part. No longer will unemployment be a grim sentence to months or years of idleness and despair. Instead, it will be a challenge, with the possibility of doing something valuable and meaningful for our society.”
“National Community Service will be operated on a local level. The skills in a particular community will be assessed and evaluated, and managers of these schemes will be chosen by local suffrage. Credit Unions may serve as a model for such projects. All such NCS schemes will devote a proportion of their talent and income into a national pool, which will be redistributed to poorer areas. These NCS schemes will prioritise education and healthcare above all others, as well as domestic insulation schemes and other sustainable development projects. Teachers will have classroom assistants drawn from this pool, and nurses will have care assistants, administrative help, and extra cleaners too. Elderly people in the local area will be assigned care-workers. Creches will be assigned extra staff. Pre-school parenting and support groups will be established for all. Everyone will receive the appropriate training. In particular this will free teachers and nurses to be more effective and productive in their work. Mentoring and apprenticeship schemes for adolescents will be sponsored, encouraging a transfer of skills and crafts from one generation to the next. Those who are addicted to drugs and/or alcohol will be offered counselling and support to enable them to participate in the NCS schemes. We recognize that neglecting them results in a disproportionate level of social exclusion and crime in our society.”
“As everyone knows, the black economy thrives during a recession. Any earnings above the minimum income will be taxed fairly, so as not to create a poverty trap. We will encourage the development of local bartering schemes or LETS, to be administered by each NCS council, in association with local Credit Unions and/or Post Offices. Subject to a reasonable upper limit, all benefit-in-kind generated by someone participating in such a scheme will not be taxed. This is to encourage a culture of vibrant local enterprise, in particular the areas of adult education, horticulture, agriculture, childcare, the arts, and care assistance for the elderly. If an individual does well out of such a scheme, they will be encouraged through low-interest loans to become one of the many SMEs that this country will need to thrive in the future.”
“All tax loopholes for the wealthy are to be abolished, without exception. Those who are very wealthy will have to accept that for five years they are going to carry a substantial tax burden.”
“We are imposing a severe carbon tax in urban areas, and the money raised from this tax will go towards the doubling of local transport services. In rural areas, carbon tax will be structured to encourage the acquisition of greener vehicles.”
“The only way we will survive this emergency is if we all pull together and sacrifice something, in the knowledge that Ireland in ten years’ time will be the richer for it, and be proud of what she has achieved. To this end, all donations to local NCS schemes will be subject to tax relief. This money is to be dedicated specifically to pay for the services of state-employed professional planners, accountants, architects, agriculturalists, educationalists, business people, doctors and social workers, who will guide each local area’s projects and provide appropriate training, in accordance with this government’s intentions. These professionals will take one day per week of unpaid leave to enable them to advise their local NCS scheme. The larger this NCS expertise fund is, the smaller the wage bill for the civil service. NCS fees won’t be as high as Civil Service wages, but each civil servant will have the satisfaction of engaging in a worthwhile local constructive project for one day a week. We want to ensure that all that effort and money over the next five years is used efficiently and with an eye to the future. All accounts and decisions are to be presented annually to the local community for scrutiny and approval, and each NCS scheme will be strictly monitored by an ombudsman, who will have the power to raise standards and ensure transparency in all its workings.”
“To those who question the notion of offering tax relief for such investments, the comparison has to be made: either we invest in the private ownership of bricks and mortar, or we invest in our people. The choice is yours.”
“We are reversing our decision to abolish the medical card for the over-seventies. However, in return, all those over seventy will be required to partake in a national health screening scheme, with regular compulsory checkups and tests. Prevention rather than cure will be the byword for care for the elderly. Anyone who wishes to avoid this intrusive regime of care may go private. GPs will be paid to keep their patients well, with bonuses paid to those surgeries that introduce health promotion schemes.”
“This government will establish a commission to study the possibility of inviting the UK’s National Health Service to take over the HSE, to improve efficiency and eliminate bureaucracy. This will result in an all-Ireland approach to healthcare on this island, allowing greater economies of scale. British consultant and GP contracts will be introduced as a result, and no longer will Irish health professionals enjoy some of the highest incomes in Europe, in a country that simply cannot afford them.”
“After these difficult five years are over, we will be in the enviable position of having bright, modern school rooms for all our children, who have been well taught and supervised, mentored and apprenticed. Our homes will require much less energy from abroad, having been insulated properly. We will not have to pay anything under the Kyoto protocol. Local economies, based on LETS schemes, will be enjoying a new sense of productivity and self-esteem, instead of a sense of shame and deprivation. We will have fostered a new sense of community in those who have helped improve the primary and secondary educational and health facilities in their local area, helped in the care of the young, the infirm, and the elderly, as well as invested in their own third-level education. Local food production, in particular organic foods from allotments, will be at record levels. A new system of local food distribution will be established, which will keep costs low. Food available on LETS schemes will ensure that no one goes hungry, and insulated homes will mean that no one is cold in the winter.”
“To regain competitiveness in the world market, all companies that sell products or services abroad will avail of a new scheme. Instead of paying high wages and high taxes, these companies will be able to pay lower wages, but with their employees’ take-home pay being subject to a temporary lower rate of tax. In return, these companies will be obliged to take on people from the local NCS schemes and provide them with work experience and on-the-job training. The bigger the company, the more sophisticated the training is to be. This scheme will effectively be revenue-neutral, because these companies will pay the minimum income to those they employ from the NCS team. It is, in essence, privatising social welfare payments. But the advantage of it is that, after the five years, the investment in the local community will be producing social and material dividends, and the companies will be in better shape to compete on world markets, benefiting from employing a larger workforce for the same wage bill.”
“We have the imagination and the resources to change our society fundamentally, to bring back a sense of local involvement and community, to eliminate the despair that idleness and poverty brings, to care for our children and the elderly, to instigate a new culture of local entrepreneurship and enterprise, and to become more resourceful and self-sufficient as a people, so we will never again be so vulnerable to the hurricanes that can assail the world markets.”
When Mr Lenihan sat down, he was greeted with a stunned silence from the house.
