WHAT WE WANT/David Begg: The Irish Congress of Trade Unions (ICTU) cannot endorse the broad thrust of Government economic policy as signalled in the Book of Estimates.

It is not that changed economic circumstances per se make it difficult to support the Government line. It is the apparent unfairness of their approach, as epitomised in the abolition of the first-time house buyers' grant and reneging on the commitment in respect of medical cards, that fails to command support.

The problem goes deeper than any one measure, no matter how unpalatable it may be. We do not agree with the pro-cyclical economic policy being pursued by Government. Taking everything into account, the Irish economy has had a relatively soft landing. It should be possible to rebalance the public finances over the economic cycle. What the Government is attempting to do is causing unnecessary hardship to a lot of people.

The "golden rule" approach to fiscal management adopted by Britain is more rational. It allows for borrowing for investment purposes over the economic cycle. The complementary "sustainable investment rule" requires that the ratio of net public-sector debt to GDP be set at a "stable and prudent" level (40 per cent in the UK's case) again over the economic cycle.

Given our need to make long-term investments in infrastructural development, this model seems more suitable to Ireland's needs.

Whatever view one takes of the appropriate stance of fiscal policy, there are a number of serious and interrelated problems which, if put on the long finger, could fatally inhibit our ability to respond to a recovery in the international economy when it comes. Each of these problems is complex in its own right but the overall effect can be simply stated.

The absence of affordable housing means that young couples can only afford to buy, for the most part, in the provincial towns around Dublin and the larger cities. Since public transport is inadequate, they have to commute to work by car, thereby clogging the roads. Since both partners have to work to pay the mortgage they have to avail of, and pay for, childcare, which is becoming increasingly more expensive. The high living costs associated with this lifestyle forces people to seek compensating wage increases, which puts pressure on inflation.

The clear outline of a vicious circle is discernible in this. If the Government does not intervene to ease the situation, then the bottlenecks will get worse. The question is what can be done?

Take housing specifically. The problem is not confined to those who can aspire, albeit with difficulty, to buy in current market conditions. Although there were more than 50,000 houses built last year only 272 fall into the category of "affordable" within the context of the 20 per cent that builders are supposed to include in each development. In addition, there are 54,000 families on the local authority waiting lists for social housing.

At the extreme end of the spectrum, more than 300 people sleep rough in Dublin every night. So, there is a housing crisis at all levels and cutting back the capital allocation by 7 per cent in real terms and abolishing the first-time house buyers' grant is hardly an indication of serious intent to deal with it.

At the core of the housing problem is the availability and cost of building land. It is common knowledge that seven or eight developers control vast banks of building land in the Dublin area and they are able to drip feed it onto the market in a way that keeps queues of people lining up to buy houses as they become available.

This is a cartel operating against the public interest. The basic tools to deal with this issue have been available for nearly 30 years. It is time to revisit the Kenny Report of 1974 because in that report will be found the means to stop this exploitation of young people. All that is needed is the political courage.

In our pre-Budget submission to the Minister for Finance, ICTU proposed a number of initiatives:

• Maintaining corporation tax at 16 per cent but introducing a system of R&D tax credits such that the net tax liability would work out the same for the type of multinationals we want to encourage to put down roots in Ireland. This would be a more effective use of taxpayers' money than giving it away in reduced corporation taxes to the likes of the banks;
• Increasing employers' PRSI - as the British government did last year to fund the NHS - but excluding those employers providing good-quality occupational pension schemes. Unless this coverage is increased, the burden will eventually fall back on the State;
• Providing some relief for childcare costs through a system of tax credits;
• Reviewing the extensive range of tax shelters, which have benefited the wealthy, to see whether they still serve any economic or social purpose.

This Budget is extremely important. It is not so much the more difficult economic climate that is the issue. The workers of this country are intelligent people. They want the public finances to be managed competently but with due regard to social justice. The Budget will stand or fall in the minds of trade unionists on the quality of fairness contained within it.

ICTU will also be watching for a signal that Government is willing to take radical initiatives to deal with the structural problems identified above.

David Begg is general secretary of the Irish Congress of Trade Unions