Madam, - Does Ireland need a general election now? I think so. The problems we are experiencing are so grave that only a government with a fresh and specific mandate will be able to deal with them. The present Government does not have such a mandate and will continue to flounder. For this reason I favour an early general election even though I am a supporter of one of the Government parties.
The election of 2007 had many peculiar features. Fianna Fáil, under a then vaguely credible leader, scored well. Fine Gael had a very good election, gaining 20 seats, albeit from a low base. Labour and the Greens were becalmed. The PDs were devastated. One suspects that the resultant Government comprising Fianna Fáil, Greens, PDs and Independents deviated significantly from the wishes of most individual voters. But, so be it. Such are the vagaries of our electoral system.
Within months, however, this deviation was compounded. Taoiseach Ahern resigned when the fig-leaf to which he had clung was exposed as being just that. His colleagues in Fianna Fáil, including the present Taoiseach, continued publicly to accept the veracity of his tribunal testimony when a large majority of the electorate had ceased to do so. The price has been a further dilution of the Government's credibility and capacity to lead.
In more recent weeks the enormous scale of the economic downturn has been exposed. It stands in stark contrast to the optimistic projections of all parties at the 2007 election. Hence, no party can claim a clear mandate to carry out the kind of measures required in this new dispensation.
Even a government with a strong and clear mandate to tackle the downturn and deal with it over three to four years would face a really daunting task. The present Government, with its greatly diluted mandate, is poorly placed to do so.
The anger shown by the pensioners on the streets in recent days may well have stemmed as much from the belated realisation that the boom has been wasted and hijacked as from the immediate concern with medical cards. This Government, or at least the Fianna Fáil element of it, will continue to attract that anger.
Let us bring it to an end with as much dignity as possible. I can't think of anything that would be more patriotic. - Yours, etc.
J.A. O'GRADY,
Sion Hill Avenue,
Harold's Cross,
Dublin 6W.
Madam, - The 1 per cent levy, applied on incomes as low as the minimum wage, is a Budget measure that can only be described as unconscionable. True, the public finances are in difficulty and the Minister for Finance wants to pare back his Budget's opening borrowing requirement from 7 per cent to 6.5 per cent. Otherwise the debt/GDP ratio would have been above 43 per cent next year.
Yet that figure alone illustrates how relatively healthy Irish public finances remain, with the average eurozone debt/GDP ratio standing at 65 per cent. When account is taken of the National Pensions Reserve Fund, Ireland's net debt/GDP ratio is 31 per cent, or less than half the average ratio in the eurozone.
Nonetheless, it would have been quite possible to restructure the levy to insulate most low to above average paid workers from its effects, while still having a borrowing requirement of no more than 6.6 per cent.
Such restructuring would, of course, have challenged the sacred cow of taxation policies favouring the greedy over the needy, pursued by successive Ministers for Finance who continued to allow the PD tail to wag the Fianna Fáil dog. At odds with such policies, I myself have sat on the National Economic and Social Council whose strategy reports, notably those of 1996 and 1999, unanimously concluded the priority in income tax reform should be to reduce the burden on lower- to middle-income earners rather than the top third in the earnings tables. I stress the word "unanimously", because all such recommendations had been signed off by the Department of Finance - only to be torn to shreds by that Department's own Minister, Charlie McCreevy, when from 1998 to 2001 he slashed the top rate of tax from 48 to 42 per cent. Brian Cowen, when Minister for Finance, reduced it to 41 per cent.
Meanwhile, those on lower incomes were condemned to remain the poor relations of the PAYE regime. Now the 1 per cent levy will hit them harder again.
It is quite possible to amend Budget 2009, keep to a borrowing requirement of just 6.6 per cent, and produce a far fairer outcome not only by exempting all on the minimum wage from the income levy but doing the following:
• Increasing personal and PAYE tax credits by €100, to €1,930 each;
• increasing the standard rate band to €37,200;
• recouping two-thirds of the cost of these measures by restoring the top rate of tax to 42 per cent.
This would reduce the tax burden on everyone earning up to €40,000 a year; and other workers would not be paying the equivalent of the 1 per cent levy until they earned €75,000. Even people earning over €100,000 a year would not start paying more than the 2 per cent currently proposed until they reached €125,000 and it would rise to 2.7 per cent at €150,000.
Surely this is far better than increasing teacher-pupil ratios or charging people €100 to attend AE departments. It is time to start doing what is best for the nation rather than its wealthiest citizens. - Yours, etc,
MANUS O'RIORDAN,
Head of Research,
Siptu,
Liberty Hall,
Dublin 1.