Budget Having “Devastating Effect”

Budget 2011 is having a devastating effect on low and middle income families, Senator Phil Prendergast has stated.

Speaking this week, the Labour Senator said she had been inundated by people losing between €20 and €90 a week because of the Universal Social Charge (USC); and cuts in tax credits, Children’s Allowance and Welfare payments.

“Yet, Fine Gael and Fianna Fáil want to continue with the policy of cutting low and middle incomes in the coming years when It is obvious that Budget 2011 will put thousands of people financially under.

“Interest rates will be going up in the second half of the year and inflation is on the rise again. This will make even more mortgage repayments unaffordable and put further pressure on the Social Protection budget.

Hundreds of thousands of homeowners bought their homes during the property bubble and still have to make repayments based on those prices. And they also have to cope with increased margins on mortgages imposed by banks.

Meanwhile, she said, this Budget would cut €6bn from the economy which would mean more businesses going to the wall.

“Construction employment has already collapsed. Now retail, which is already in big trouble, is next to go. This will hit part-time workers particularly hard – many of whom will be hit by the outrageous €1 cut in the minimum wage. Despite this, Fine Gael and Fianna Fáil have committed to cutting at least another €12 from Jobseekers and other Welfare payments. This is plainly not sustainable for the people nor the economy. And it means more problems for the banks.

“Budget 2011 is already evidence that the IMF deal cannot work. The intention of Fianna Fáil and Fine Gael to repeat this folly in 2012 and 2013 is further proof that the EU/IMF bailout will exacerbate our economic problems and therefore not achieve its primary purpose of preventing sovereign default.

Indeed, the IMF is already on public record indicating the bailout terms will not work and EU members are also waking up to this. Ireland cannot wait for social and economic devastation to take place in order to prove the point”, she said.