Sinn Fein heading for mainstream Social Democracy?

It looks like Sinn Fein is heading for the centre left. Brian Dowling looks at how the party is working away from its revolutionary socialist past. More prosaically, it may be further evidence that the party is preparing to move away from Utopian to practical mode, in the face of some sharp criticism of their economic policies.In the Irish Times, Mark Hennessey (subs needed), the party thinks its time for the state to grab something back from the Celtic Tiger:

The existing 12.5 per cent rate in the Republic should rise to 17.5 per cent, while Northern Ireland’s rates should be lowered to the same level to allow for the development of an all-island economy.

“Sinn Féin challenges the view that the 26-county State would not be competitive and the economic boom would not have occurred but for the low level of corporation tax, now less than half the EU average,” said the party’s discussion document.

Multinationals are “siphoning” €25 billion out of the Republic’s economy “which could have been used to tackle the State’s infrastructure deficit, to invest in education, and training or to subsidise research and development”, the party said.

Low corporation tax imposes “hidden costs” on the economy because it erodes the “ability of the State to pay for public services, imposing a disproportionate tax burden on the poor thus aggravating poverty, and undermining R&D [ research and development] essential to the economy’s future.

  • Mickhall

    I would be very interested to hear what SF members or supporters think about this. Funny thing is, only this morning I was only discussing SFs future tactics with a former long time member of the PRM who said in his view the party, especially in the south would move to the right.

    I mentioned that even though I feel the Adams leadership have acted with folly at times, SF is still full of some of the best working class militant’s Ireland has produced and this being so, surly they will not sit on their hand and allow Mr Adams to do to SF what the Blairites did to the British Labour Party. For if they do SF will not even be a left reformist party but a vehicle of a few who seek power at any cost. My friend felt SF would go the way of the LP as in recent years the SF rank and file, including many decent republicans simply have not shown the will to oppose their leadership. Nor even demand of them an explanation when what they have told the membership has been proved to be nothing but lies.

    I understand the above economic paper is termed as a discussion paper, but what’s the odds on it become party policy for the forthcoming southern elections.

  • patmclarnon

    While I have not read the full discussion paper I sdee nothing from the article that indicates a lurch to the ‘right’. Quoting the example of the Nordic states and keepimg the state at the cente of health provision etc would suggest otherwise. Has anyone any further details?

  • Alan

    I thought the line was don’t believe anything in the Indo!

  • Mickhall

    My post may seem a bit more critical than I meant it to be, im just interested if anyone has any thoughts on this.

    regards.

  • JD

    Sinn Feins’ rivals in the 26 counties at the next election have decided that the parties economic policies are the spot were they can attempt to land some blows in the mind of the electorate. Therefore they are pointng to 1970s policy documents and talking about North Korea. Of course Sinn Fein have a duty to make their actual position clear as well as pointing to their costed vision of an Ireland of equals in the 21st century. I have not seen the document in full, however what I have seen is certainly no lurch to the right, but an articulation and countering of the economic propaganda that has been used in recent times. The elecorate deserve to hear how SF would deliver on an economy and turn an election slogan into a living reality.

  • What next? The Social Democratic and Sinn Féin Party? Are they ever going to stop going through the SDLP manifesto with a highlighter picking out policies they want to steal?

  • PatMcLarnon

    ElMat,

    the SDLP are a minor 6 county party who, despite their so called republican credentials, are confined by Britain’s border and do not organise in the rest of our country. Would it not be better to leave all Ireland economic policies to those organised in a manner best able to impliment them?

  • Bretagne

    PatMcLarnon –

    I agree that the SDLP should organise on an all-island basis – or merge with FG.

    While SF is free to challenge the assertion that “State would not be competitive and the economic boom would not have occurred but for the low level of corporation tax” – I suggest that raising it by 40% is an amateurs way to test the theory.

    More measured policies would be needed to convince me that SF are a safe pair of hands around the economy – this is an appalling start

    THe big issues around infrastrucute down south is
    the poor way the projects have been handled until fixed rate contracts got out in place – rather than the amount raised from corp tax.
    To see this work well llok at the Dundalk Western by-pass, where the combination of fixed-fee contract and an incentive to complete early drive the right private sector behaviours.

    USe of terms like ‘siphoning’ and ‘subsidy’ are worrying in terms of how SF see the states share of the economy – corporate taxation that is high and state intervention would mean the south economy would be as stagnant as the North’s.

    I suggest SF keep lurching – but at least this is a start!

  • Would it not be better to leave all Ireland economic policies to those organised in a manner best able to impliment them?

    Not if it’s left if SF’s hands. Their ‘policies’ would destroy the southern economy. As regards the north, I seem to recall that not so long ago the provos’ raison d’etre was to destroy the economy. Are we really supposed to trust those amateurs with our taxes? Yeah right.

  • Pat Mc Larnon

    You fail to explain how raising corporation tax from 12.5% to 17.5% would destroy the economy in the southern part of our country.

    Thankfully you don’t even try to defend the partionist mentality that exists within the SDLP.

    When the six county SDLP start organising on a nationwide basis then they are worthy of comment.

  • abucs

    Sinn Fein were always going to have to change their ecenomic policies. There’s no secret there.
    And really there was no need until they got closer to actual power.

    Choosing the Nordic countries model is a good balance between economic growth and social welfare in my opinion. It’s system has been shown to not only work but to produce superior results.

  • Bretagne

    Pat –

    The SDLP are worthy of comment – at least some economic consistency in their policies – and
    Though their economic policies are outmoded and too leftist to drive a modern economy – but understandable given the stagnation North and the subvention dependency that exists North.
    Or put it another way – let the British pay and
    subsidise – SDLP? – Striking Depressing Life Prospects. But SF’s economic policies are mad –
    and in economic terms = Surely F***ed!

    Reducing corp tax in the North is laudible but what is the roadmap to achieve it?

    Re corporation tax in the South – it is SF challenging the accepted economic view – however to at least address the question….
    the economy needs even faster transitioning from agriculture to that horrible phrase – the knowledge economy – towards agriculture as an example, being circa 4% of GDP – or to out it another way circa 8000 additional jobs per annum. The momentum is there now to achieve it – while the loss of the family farm is not to be celbrated it is entirely expected. Private sector is taking up that slack as they have the reward – I am very certain that Bank of America as an example would have reduced employment markedly as a result of the takeover of MBNA -had the retined profit incentive not been present. This would lose up to 1600 jobs in Carrick – the incentive is there to use the lower corp tax to offset the additional costs incurred from the geographic remoteness of the island. We need nore MBNA’s in the econony – willing to invest in more rural areas – but if the after-tax profit for this type of business is lowered – and the costs of business are higher, and employment costs in Ireland are higher than emerging countries – the jobs will migrate.

    Give employers the incentive and give individual the income – you can build a lot of infrastrucute using the private sector smarter and taxing the optional use of the infrastructure. See toll-roads, and non-tolled dual carraieways in France as the example of how to develop a road network

    Meanwhile back in the backwaters of SF economic policy – a few weeks ago SF was asking for subsidies to hang onto the sugar beet industry in the south!

    Industries die and new ones created – ship-building in the North, or farming in general, or sugar beet specifically. The job is to prepare for the transition and help the new industries create – the fuel for that is keeping employment costs low, and the incentives intact

  • George

    Pat,
    The yield from corporation tax in 1997 when the rate was 36% was about €2,160 million and this has increased to about €5,330 million in 2004.

    Dell and others have all said they would seriously reconsider their positions if the Corporation Tax rate was changed.

    There is no guarantee that raising it will increase revenue but there is every chance that raising it will lead to less revenue.

    Plug all the gaps on the high wage earners paying no tax and remove all those extra reliefs would be a better way to go.

    Or SF could show real cajones and demand a property tax on second homes. But not a chance of that as they court the middle class southern vote.

    They could even advocate removing mortgage relief and put the cash into social housing. Or how about re-introducing fees for those who can pay?

    Or maybe removing the children’s allowance from millionaires and using the cash to help those in poverty.

    There are tons of ways to go but it’s the easiest and most cowardly option to talk about raising corporate tax.

  • Holt

    How did the provos arrive at this magic number of 17.5%?

  • Keith M

    As good as it would be to see the provos leave early 20th Century class politics behind and join the real world, I think that they have a long way to come. They could start by breaking any connections with the communist dictatorship in Cuba, re-aligning themselves in the European Parliament and drop idiotic proposals (only made this week) such as a huge increase in corportation tax.

    It has to be said that the comments I’ve heard about SF/IRA being this generation’s Workers Party do seem to have some ring of truth. Mind you “Vote SF, we’re slow learning Social Democrats” mightn’t be the best election slogan for next year.

  • Mickhall

    It never ceases to amaze me when the supporters of neo liberal economics come onto a list like this and attempt to dress up their retched theory as some sort of success story. The USA, the prime practitioner’s of this dross, is supposedly the richest country in the world. Yet a third of its people live in comparative poverty and well over that number have no health care at the point of need. As to letting the market decide, well they are simply not fit to do so as buisness will always decide what is in it’s best interest, that is the way capitalism works, governments there fore need to regulate it, otherwise we will all end up like Russia 2006, is this what we really want?.

    For another example back to the US, if I remember correctly the minimum wage in the US is the same today as it was 8 years ago. Why because the likes of Walmart are not socially responsible and their profit margin is their sole motivating force.

    In my book any one who says trust the market is either a fool, on the make, or they lack the imagination to understand just because they are doing fine, others may not be so lucky. Nor do they question if their own well-being is in any way linked to other peoples misfortune. The one historical certainty we do have is the market cannot be trusteed to be socially responsible. I have already given some examples but I could have mentioned the shameful rip off that went on in the soviet union and its satellite states after their demise. Or the manner in which the WTO and WB insists on ball-breaking terms for loan’s to third world nations. Or the way multi national corporations have got their snouts into the money trough in Iraq which was meant for the reconstruction of that nation, little of which seems to have occurred. Thus in Iraq as elsewhere far from lifting the majority of the people of these countries out of grinding poverty, neo liberal economics and the corporate monsters who are its main beneficiaries plunge people who already have pitiful living standards further into penury

    I think SF will be making a major error of judgement if it takes a turn to the right with its economic program; and to use the excuse it is a nessety to do so, as its political opposition in the south will make hay out of its current economic policies is with respect laughable. Surly SF members have realized FF, FG ILP will use any means to discredit SF, if it is not its economic platform it will be something else . To let the like’s of these gombeen creatures set SF agenda by altering it platform to the right is pathetic and I hope the membership refuse to dance to FF etc tune.

    If this platform was good enough to fight a war under, to kill and be killed then what are SF members saying, because FF etc will make a bit of hay out of it it must be bined. PLEASE. Having said this, there is nothing wrong with SF dotting the i’s and crossing a few t’s, that is what any major party come election time should do. SF is either a left republican party or its nothing worth having IMO. For me it’s best option is to become a left reformist party, after all the pro neo-liberal, right of centre ground in the south is pretty crowded, there is no room at this particular inn for SF.

    There are other issues here, SF was not set up as a vehicle to improve or maintain the life styles of members of the all ready comfortable middle classes, but to reunify the island and represent the dispossessed and working classes. Not to go before the electorate with a program of redistribution would be to betray all who have gone before.

  • Dave

    These are carbon copy Democratic Left policies.
    The provisionals have become the officials!

    It looks like the stickies won after all !!!

  • Bretagne

    Mickhall –

    Fair play to you defending your corner and your purer vision for republicanism – at least you’re not window dressing to keep people on board.

    Where I challenge you is that without a competitive economy you won’t have any working class – but you will in time have an unemployed and unemployable class – and any brutal assessment of the north workforce would class it as having a large number of unemployable people – lack of entreneurship and sponging from the British Exchequer over a generation has got us there.

    Manufacturing and farming are dying industries – so what used to be considered manual jobs are being replaced on the island by knowledge-based jobs – so is the son/daughter of a manual worker working a finance house in Dublin the new working class?

    I am for enabling new industries and I see it is possible to do that without the excesses of US model. Look at France – bar a few errors around the working time directive (being reversed), and over-egging corporation tax, and unemployment benefit that is too generous – they have an enviable standard of living, decent pension provision, vigilant TU’s. If you need a cancer operation you get it and I know from personal experience – it is next day and no ifs or buts.

    I understand from my French colleagues that France will take corporation tax down this year from 34% to 28% or so, with a five yr rollback towards 20- its has largely addressed the relatively high costs of employment in France to kickstart its economy. Its trimming down the public sector which is circa 48% of GPD. Overall I would expect UK Germany and France – now that a model that SF could work to and have some credibility. The point is everyone is worried about the new entrants and low corporation tax (I have seen jobs in my industry going to Latvia as Corp Tax is 5% (or thereabouts).

    So SF are dabbling here at present – it will probably take several more years for the thinking to nature – but if it wants to hold the balance of power – to coin a US phrase –“it’s the economy -stupid” .

    In the north – and regarding devolving powers – I don’t trust the politicians to run the easily controllable economy in the north, and change it for the challenges from Eastern Europe. China, and the Far East .

  • Pat Mc Larnon

    The question to be asked is what takes precedence in the forumaltion of policies to put before the people?
    Most parties are now putting raw economic grandstanding and populism before the implimentation of social and egalitarian equality.

  • Mickhall

    Bretagne,

    Very interesting post, I agree with you that Irelands future will be a service and knowledge based economy, but for this to happen public services that provide state education need to be improved ten fold, not cut back. Thus I’m with Pat on the need to implement social and egalitarian equality. For a nation to have a successful, healthy economy it must have an educated, healthy and confident workforce to man it. If not we end up with sweat shops or a two thirds economy like the US.

    There is more to running a successful business than simply working within a low wage low tax environment. For example many companies outsourced to India and elsewhere. However they have found out their main customer base within the EU is very unhappy with the service they are getting. True there are racial and cultural reasons for this but it more than that. People are beginning to come to the conclusion if they are going to pay their hard earned cash for a product, the least the company which produces it can do is put some work and wealth their way.

    In the future consumers will use there power more and more in this way. Some of the profits the multi national or large home grown companies are making are ridiculous and can only be based on the exploitation of both employees and consumers.

    Dave,
    We have witnessed revolutionary turmoil of a type in Ireland for the last 30 odd years, although it had it’s moments, in truth it was not been a pretty sight, few want a replay if another way forward can be found. Perhaps a spot of left reformism is just what the island needs, after all would a fairly regulated market economy, alongside decent state education, health care, etc and cross border institutions really be so bad?

    Regards to you all.

  • Bretagne

    Mickhall

    I would look for savings in in the education sector and they are there – clearly running two education systems to third level leaves lots of room for improvement. I have seen the stat 40,000 funded places which are unused. But I compleltely accept the need to drive eduction and R&D – amidst all the noise about the Republic’s progress – the money put into education in the 80’s is now paying off – no argumnet from me on that…

    There are softer and more wasteful targets than education…some examples.

    1) Move Driver and Vehicle Licencing for the island into one place, OR to Swansea and save some expenditure – or even privatise it.

    2) 11 Stormont Departments? Indefensible by any stretch of the imagination.

    3) 26 Councils – I like the idea of making it one and calling it assembly (that I heard about a month ago on Lets Talk) – at least this is in train.

    For me I see no contradiction in driving wealth creation/new jobs that a well-educated workforce can avail off.

    What you cant do is SF’s current policy – to slow the inward investment by raising corp tax and then over-taxing your high achievers earning over 100,000 per annum – or those people most likely to be working in R&D jobs – that you wont now be creating by rasing corp tax. I rest..