Business

Anger against water tax shakes up Ireland

DUBLIN: Mass protests against new water taxes set to be introduced in Ireland from January 1 have shown up deep wells of resentment after years of austerity, even as the economy rebounds.

Unease about the charges, agreed as a condition for Ireland’s EU-IMF bailout, is threatening the current coalition government which came to power at the height of the financial crisis in 2011.

“These new charges are coming at a time when the government is continually saying we’re in a recovery,” socialist lawmaker Ruth Coppinger told AFP.

“If we’re in recovery, then why are they continuing to implement austerity measures and taxes?”

Tens of thousands of people have taken to the streets in recent months, echoing some of the angry protests seen in other crisis-hit eurozone economies that have failed to rebound as quickly as Ireland.

Their anger comes as the government is predicting strong growth this year after Ireland became the first eurozone country to exit its bailout programme.

This month ratings agency Standard and Poor’s raised the country’s credit rating to “A,” from “A-,” forecasting it would grow 3.7 percent on average between 2014 and 2016.

“People are fed up with austerity,” said Alan Lawes, 51, who took part in the most recent major protest outside the parliament building in Dublin.

“We want the water charges scrapped. We want the whole issue of austerity challenged,” he told AFP.

‘Explosion of public anger’

The water tax is the main reason support for the ruling centre-right Fine Gael party and its centre-left junior coalition partner, Labour, has slipped despite Ireland exiting the bailout last December.

The government has been forced into an embarrassing climbdown rushed through parliament this month, slashing costs and abandoning metered charges in response to some of the protesters’ demands.

“We had almost complete quiet for six years so this explosion of public anger on this issue certainly took the government by surprise,” said Gerard Howlin, a political commentator.

“They have lost a swathe of political capital, a lot of which they are simply not going to regain.”

The water charges are one of the final pieces of almost 30 billion euros ($36.5 billion) in spending cuts and tax hikes since 2008 that have left many Irish disgruntled.

Domestic water charges have existed before in Ireland, but were scrapped in 1997 when they folded into general taxation by local authorities.

The reform not only brings back water bills, but shifts operation of services from local authorities to semi-state company Irish Water.

Revelations of massive consultancy fees and staff bonuses at the new utility and concern about its future privatisation have added to public anger.

Following last month’s government U-turn, water charges have been capped at between 60 and 160 euros per household, depending on the size, but opposition remains.

‘Complete political meltdown’

“Water is a very emotive issue because we need it to survive, but it hasn’t been sold very well either,” said Gary Murphy, a political scientist at Dublin City University.

“It’s probably an austerity tax too far that the government could have done with putting on the back-burner.”

Opposition has come from all sectors of society.

Campaigners against the charges are now calling for a mass boycott of the first bills, which are due to arrive in April after the first quarter.

“The best way to get this abolished is to have massive non-payment,” Coppinger said.

Should the government fail to rebound from the water protests, commentators believe the Irish political landscape could be dramatically changed after the next general election, scheduled for 2016.

Political observers say there could even be lasting damage to the parties in power similar to the demise of Fianna Fail after it agreed to Ireland’s bailout.

“The political architecture that was predictable and predominant will simply no longer exist,” Howlin said.

“If there is a continuation of that process in the next election, the result will effectively be the complete meltdown of a political system that operated since the foundation of the state in 1922.” – AFP

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