SIPTU, Trade Unions and the Bin Tax:

This document has been prepared following a meeting earlier in July between representatives of the Dublin City Anti Bin Tax Campaign and Jack O’Connor, President, and Michael Halpenny, National Industrial Secretary, of SIPTU. In that discussion it was agreed that the DCABTC would put our ideas on the issue of bin charges and other stealth taxes on paper. The campaign appreciates this opportunity to put our ideas forward for consideration not just in SIPTU, but in the trade union movement in general. It is our intention to circulate this document as widely as we can for unions, trades councils and rank and file union members.

The question of bin charges is an important issue for trade unions and their members. At its most basic level, bin charges, and other stealth taxes like hospital charges, have a very direct impact on the value of trade unionists’ take home pay.

Just to give one very clear example: a prominent SIPTU activist who works for a manufacturing company on Dublin’s north side, has explained that the basic starting rate for an unskilled workers at his workplace was 340 Euro a week in July. This figure is equal to the yearly bin charge in Dublin city if a wheelie bin is put out for collection on a weekly basis. In other words, the bin charge alone could amount to a week’s gross income, or 2% of annual pay. And the Dublin charges are towards the lower end of the scale, with some far higher rates charged elsewhere in the country. .

It doesn’t take much to see how, for lower paid workers, stealth and indirect taxes are eroding the wage increases and concessions on income tax negotiated by the trade unions. Those who claim that we are a ‘low tax’ (that is a low direct tax) economy forget that the tax reductions to PAYE workers during the Celtic Tiger years were a trade-off, to boost take-home pay, in lieu of higher pay rises which we might have claimed from the employers, and not a trade-off for claw-back indirect taxes.

The idea that a charge like the bin tax represents a financial burden on working class families is dismissed by arrogant and well heeled government Ministers and spokespersons. We are constantly told that we are living in the paradise of the ‘Celtic Tiger’, where the two-car, annual-foreign-holiday family is now the norm. How is it then that some 45,000 households, a quarter of all those in the Dublin city area, have a waiver for the bin charge? The conditions for receiving such a waiver are extremely stringent. You need to be living on social welfare or state pension, with no other form of income, such as a working family member, to qualify.

This figure alone points to a very high number of people living in or just above poverty conditions. Working families where people are on low pay or in part-time work wouldn’t be much better off. In fact they could be worse off, due to having to pay the bin tax, not having a medical card and so on.

Then there are the broader issues involved. These relate to the general direction of taxation policy, the funding of essential public services, privatisation and protection of the environment. These are important questions for the trade union movement, as are the other issues thrown up in the course of the bin tax protests, and now in the Shell to Sea protests, the use of jailings to cut across the democratic right to engage in peaceful protest.

Taxation: the more you earn, the less you pay?

Over the last 12 years the Fianna Fail/PD government has overseen a fundamental change in taxation policy. The purpose of this change has not been to reform an unjust tax system which led to the explosion of anger and mass mobilisations of PAYE workers in the late 70s.

Since the foundation of the state there has been an extremely lax attitude by successive governments towards the collection of income taxes. Apart from denying the state the means to develop significant social services, health and education and modern infrastructure, as was the case in other post war European states, this also created a mind set of the wealthy and self employed that income taxes were nominal, something to be paid for by people more foolish than themselves.

The introduction of PAYE and VAT in the 1960s firmly placed the burden of paying for the belated increase in social and welfare spending that began in that period on working people Widespread tax evasion by the wealthy and the self employed continued unabated. John Bruton has admitted his government in the 1980s were aware of the problem, but feared action to resolve the problem would result in a flight of capital. Another well-known former government leader not only knew of it, but availed of the ‘system’ to launder the bribes he received from big business.

However the PAYE campaign and the subsequent exposure of a whole series of tax evasion scandals which showed an endemic culture of illegal money laundering among the wealthy and powerful, and the self employed, facilitated by the banks, meant that something had to be done. The response by governments involving Fianna Fail, the PDs. Fine Gael and Labour were to, in effect, legalise the problem by giving two amnesties to the tax dodgers and to introduce a plethora of legal tax avoidance schemes.

There are now some 320 plus such schemes to facilitate tax avoidance for those with the means to avail of them, to the extent that eleven people in 2003, earning 1 million Euro a year, paid zero income tax. The cover for this policy of legalised tax dodging is that these schemes will direct investment into areas which need it. ‘Investment’ has flooded into areas like holiday homes and car parks, but more importantly into the provision of private rented accommodation. This has fuelled inflation in house prices, pushing the cost of owning a home beyond the reach of many working families. Recently Threshold has warned that the lack of maintenance of much of this private rented accommodation threatens Dublin city with a return of the tenement slums.

Another area that government taxation policy has directed ‘investment’ into is the private health care area. There has been a boom in the ‘business’ of providing residential care for the elderly. The quality of this care is very open to question given the lack of supervision by state agencies. There is also a boom in private hospitals and clinics. While public hospitals are being closed, or have services reduced to the most basic level in less populated areas, state of the art private hospitals are being built in the main urban centres where there is a wealthy clientele to support them. This philosophy of health care as a business is fundamental to the crises in our public hospitals.

That is one aspect of government policy. The other is the adoption of the extremely unprogressive ideas of the British Conservatives and US Republicans in cutting business and income taxes, and making up the shortfall by cuts in funding for public industry and services, by privatisation, and by increasing indirect taxation through the introduction of individual charges and various stealth taxes.

You do not need to have studied economics to understand that this is a regressive policy of easing the tax burden for the wealthy and increasing it for the poor. If you are earning 1 million Euro a year and paying zero income tax, the standard of care in your local public hospital or state nursing home or school is of no great concern. Such people have the best of health insurance to cover private health care. Their kids go to private schools. Paying a couple of hundred Euros on bin charges is a quite reasonable deal.

The facts of life for an average working family are very different and it is not necessary to detail that for a trade union member. Bin charges are just one aspect of this situation but working people understand that bin charges represent the thin edge of the wedge. They have seen the massive increases in these charges since they were introduced. They know that if the bin tax is established, a water tax will follow. Is it a coincidence that the same day Finance Minister Cowen warns of the burden of high Commercial Rates by Local Authorities on small business that IBEC issues a statement calling for the introduction of a local tax? The agenda is clear, the reintroduction of Domestic Rates through local authority stealth taxes.

Funding our public services:

We are constantly told by those who defend these so-called pro market policies that ‘there is no such thing as a free lunch’. The irony of the fact that it is they, and not us, who eat all the free lunches, escapes them. It is even more ironic to hear those who have, in government, presided over massive tax evasion, and now preside over massive tax avoidance, argue that public services have to be paid for.

The DCABTC is in favour of well-funded, high quality public services, with those who provide those services on good trade union pay and conditions. We are in favour of people paying their fair share in a just and progressive tax system to pay for them. A just and progressive income tax system is a simple concept, one where the more you earn the more you pay.

We are absolutely opposed to the reactionary idea that public services should be cut or privatised to facilitate cuts in income taxes. We believe it is the duty of any responsible citizen to pay a fair proportion of their income to fund public services for the benefit of all the community.

What we object to, as PAYE workers, either past or present, is being forced to pay twice in an economy where profit taxes are one of the lowest in the world, and where tax evasion/avoidance by the wealthy and self employed are endemic and facilitated by the state and major institutions like the banks. The bin tax, like hospital charges and other stealth taxes, are double taxation on PAYE workers.

The idea that Ireland is a low tax economy is true for business and the very well off, but, as has been shown by the recent TV programme ‘Rip Off Ireland’, is not true for working people. The trade union movement must press home the demand raised by the Irish Congress of Trade Unions for Corporation profit tax to be raised from the current figure of 12.5% to 20%. It must demand an end to tax avoidance schemes for the wealthy and self employed which the Revenue Commissioners estimate cost the Exchequer up to 8 billion Euro a year.

The funds for a wide extension of quality public services and infrastructural development are there without increasing the tax burden on working people. It is a question of political will and philosophy as to whether they are realised. The question of the management and democratic accountability of those in charge of these services is another matter.

Prior to 1977 the main source of funding for Local Authorities and the services they provide came from the Commercial and Domestic Rates system, a form of local taxes. In a stroke to win that year’s general election Fianna Fail promised and then went on to abolish Domestic Rates. The shortfall in funding for local services was to come from a Rate Support Grant from central government. VAT was increased to provide extra cash to central taxation.

The problem since then is that the RSG has been pared back. Councils are forced to look to all sorts of ways to fund their services, or to cut the services provided. By denying councils proper funding the government are forcing them to carry through stealth cuts and introduce stealth taxes. The DCABTC wants the RSG increased by government to a level which will provide good quality services, good jobs and conditions for council workers, and without recourse to double taxation in the form of charges.

Privatisation: waste management is big business:

Some in the trade union movement have argued or have a fear that if we don’t pay the charge the service will be privatised. The reality of what has happened over the last years shows the opposite of this to be the case. About 50% of Local Authorities have privatised the normal bin collection service. The area of green bin services and recycling is probably 100% in the private sector. This process has gone hand in hand with the introduction of bin charges.

The introduction of charges, enabling private companies to make a profit, is a necessary precondition for privatisation. In Dublin city, the more profitable areas like recycling are in private hands. In one year alone the two directors of Oxygen, the company with the contract on the green bin/bag service, were able to pay themselves a dividend of 5 million Euros each. This same company fought a viscous battle to try and prevent SIPTU representing its workforce.

Bin workers in the city now face redundancies, in large part due to the part-privatisation of the service which has taken place. The best way to defend council workers’ jobs and conditions, and to resist further privatisation, is to demand and fight for the green bin service and all areas of waste management to be staffed by direct labour employed by the council.

Protecting our environment: the so-called race against waste:

If we are to believe people like Martin Cullen the waste management crises in Ireland is the fault of ordinary householders. We accept Minister Cullen knows a thing or two about wasting taxpayers’ money, but any examination of the real nature of the waste management crises shows him equally exposed.

There is a waste management crisis. It is precisely that, a crisis of management. The level of waste going to landfill dumps is a disgrace. It is a major threat to our environment, including safe drinking water in the future.

There can and should be a huge reduction in the amount of household waste going to landfill sites. But household waste represents at most only 15% of waste going to landfill. The big problem is the balance, which comes from construction, business and agriculture. The governments belated ‘solution’ to this problem, incineration, poses as much if not even a greater threat to the environment and public health as the problem of excessive landfill. However, the private companies who, it is planned, will operate these incinerators, will make handsome profits.

Another major threat to our environment and public health is the widespread practice of illegal dumping. Extremely dangerous waste, for example from hospitals, has been found on some of these sites. The practice has gone on for years and has corresponded with the granting of waste removal licences and contracts to private companies. The EU have been complaining for years about the habit of Irish Local Authorities of awarding licenses and contracts to cowboy outfits with a proven record of breaching environmental regulations, and the failure of the government to take any action. If the funds to local authorities, denied over the years by illegal commercial dumping, had been duly paid, there would be that much less ‘need’ for local authorities to find new sources of funds from ordinary householders for waste management.

Another area where the government have completely failed to deal with the real problem of waste is on the issue of excessive packaging, which turns householders, not into producers of, but receivers of waste. Following the example of other EU states a section was inserted into the 1996 Waste Management Act obliging retailers to take back and dispose of packaging.

In countries like Germany this resulted in the big retail outlets putting pressure on producers to cut back on the amount of packaging. In Ireland they simply put pressure on the Minister who made the provisions of the Act null and void by introducing the so-called Reepak Directive. This meant that any supermarket or retail outfit who signed up with Reepak where exempted from the bring-back provisions of the Act. (Similarly when the government proposed to cover the cost of cleaning chewing gum from the streets – a major litter nuisance – through a tax on gum, the US embassy lobbied on behalf of the manufacturers and the tax was shelved.)

It is these types of measures, reducing waste at source and recycling, which are the key to reducing the amount in total and the amount going to landfill. The introduction of the green bin/bag service and the provision of bottle banks in shopping centres have shown that people will recycle.

The problem is that the facilities provided are very limited. The green bin/bag service in Dublin city only takes paper, cans and tetrapaks and is only available once a month. It needs to be developed to take plastics and needs to be provided at least once a fortnight. It needs to remain a free service. Bring back centres provided by the council are few and far between. You need a car to use them. They only open from about 10.00am to about 4.00pm. There are often queues and they often have to close because they are full. There needs to be a major programme to provide such centres, and bottle and can banks within easy reach of every estate.

A real waste management plan would outline how such measures were to be provided and would guarantee the necessary funding from central government.

Local democracy and the right to protest:

Given a free vote on the issue of bin charges the majority of Councillors on Dublin City Council, under the pressure of the citizens who elected them, would vote out bin charges. Instead, under the threat of abolition of the Council by the Minister, a disgraceful game is played out by the main parties, allowing some Councillors to vote against, others to abstain or not turn up, but always ensuring there is a bare majority to get the charges through. This means that in a vote on running our capital city for a year, with a budget of 1 billion Euro, these votes are rushed through, with no record of who voted what way. Then afterwards we have an overwhelming majority of councillors claiming to have opposed the bin tax.

Because this charade which makes a laugh of democracy is not guaranteed to produce the right result, the government have now removed the right of councillors to take decisions on any matter concerning waste management. This has resulted in the city manager going ahead with a tendering process for the design and construction of an incinerator at Ringsend despite an overwhelming vote against on the council.

It has also meant the City Manager implementing non-collection of household waste despite a majority vote by councillors that all waste should be collected as a matter of public health. Waste collection was introduced in cities and towns in Ireland and Britain in the 1870s as part of measures aimed at ending outbreaks of deadly diseases such as cholera and typhus.

Bin workers and the right to resist:

SIPTU’s strong response to the vote of many Labour Party councillors for this year’s Dublin City Council estimates, which included a 74% increase in the bin charge, was an expression of trade union policy on service charges. SIPTU, the ICTU and several trades councils have clear policies of opposition to these charges. SIPTU, other unions and the trades councils have supported many anti bin tax demonstrations.

It is unfortunate and dismaying that SIPTU itself has negotiated an agreement with Dublin City Council that seriously compromises the Union on the bin charges. By entering into an agreement for the introduction of the pay by use system SIPTU puts its name to the operation of bin charges and ties the pay of members into it.

Co-operation with the bin charges is not a necessity. The fact that Dublin City Council have negotiated on a conditional introduction of the system, and made payments towards it, shows that they cannot simply do what they want in relation to getting SIPTU members to put bin charges into effect. Making our own strict interpretations of what constitutes ‘terms and conditions’ of employment and citing the 1990 Industrial Relations Act to ourselves is too self-restraining. If Sustaining Progress, the current social partnership agreement, really does require trade unionists to comply with the operation of bin charges, weighing for charging purposes or leaving behind their neighbours ‘unpaid’ bins, then the content of the agreement was never fully explained to the members, and it is an argument against concluding such agreements.

Our first duty is to the interests of all, including the real interests of council workers whose jobs are being slowly undermined by the government’s waste management policies. Opportunities for pay rises for changes that cut across the common good or Union policy should not be taken. And there should be no need to take them if agreements we entered into allowed us to chase additional improvements for our members without uncomfortable strings attached.

This long campaign has produced the bravery – very much in the traditions of trade unionism – with which two dozen bin tax protestors, including SIPTU activists, stood up to unjust laws to the extent of imprisonment. While such commitment is a personal choice it is not unreasonable that members and working people would expect the Union to defy the bin charges with an outright official bar on their implementation.

If that is deemed to be not possible in the circumstances there is an alternative approach that is also an alternative to consent and cooperation in relation to bin charges:

> Trade union resistance to bin charges up until the local authorities resort to the law themselves;

SIPTU is in a strong position to refuse to be pushed around on this issue. However in the event that compliance is necessary:

> That it be done under protest without formally lending SIPTU’s name to an unjust system; this would also get around the cementing of our members’ pay into bin charges.

> That there be activation of the policy adopted by the Dublin Regional Executive Committee that members wishing in conscience to collect all bins be defended by the Union.

One way or the other it is the fervent wish of the DCABTC to avoid as far as is humanly possible any friction or clash of interests between bin workers and campaigners.

SIPTU can make a difference now:

SIPTU is to be congratulated on the clear policy position it has consistently held on service charges and double taxation. SIPTU can make that policy an effective instrument by:

> Articulating a strong public position of opposition to service charges and double taxation;

> Insistence on the abolition of bin charges as a condition of any electoral or national agreements supported by the Union;

> Avoidance of agreements that condone or embrace bin charges and tie our members into their operation;

> Defence of any bin worker who wishes in conscience to collect all bins;

> Opposition to privatisation of refuse collection, organisation of all waste workers, and working for the taking of green waste recycling into public ownership.

> The promotion of co-operation between the trade unions and the campaigns against the bin charges, and material assistance to the campaigns.

This document was prepared by the Dublin City Anti Bin Tax Campaign in September 2005.