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Paul O'Connell - Máirt MFómh 30, 2014 21:56

This article was originally posted on Critical Legal Thinking on the 29th of September.

The American abolitionist Frederick Douglass once observed that if you find out ?just what any people will quietly submit to ? you have found out the exact measure of injustice and wrong which will be imposed upon them? and that such injustices ?will continue till they are resisted with either words or blows, or with both?. In Ireland, after six years of austerity and regressive tax reforms that have punished Irish working people for the benefit of Irish and European bond holders, it seems the Irish establishment may have finally discovered the measure of injustice that the people will not tolerate. The Irish government is currently implementing a plan to install water meters, so that people?s domestic water usage can be monitored and they can be charged for the amount they use. In this way they are abandoning the traditional funding model for water provision in Ireland, which saw it paid for out of general taxation. This move by the Irish government is consistent with a global trend over the last twenty years towards the increased commodification of essential services, with water seen as a particularly lucrative market. Taking advantage of the economic crisis, as most governments in Europe have, the Irish government has accelerated a broad neoliberal policy drive (privatisation of services, cuts to public sector jobs, regressive taxes) under the well-worn mantra that ?There Is No Alternative?. However, this new tax?this commodification of an essential public good?is being met with trenchant resistance from working class communities throughout the island. From Crumlin to Togher, Edenmore to Caherdavin, communities have mobilised to prevent the installation of water meters in their areas. In these protests the community activists have remained resolute in the face of attempts at intimidation from both the company established to commodify the water service, Irish Water, and the police. As well as engaging in direct action to prevent the installation of meters, the bourgeoning movement is also encouraging a boycott of the attempts by Irish Water to enrol residents as ?customers?, and calling for non-payment of any future bills.
Michael Taft - Máirt MFómh 30, 2014 16:22
IBEC has published a paper entitled ?Debunking Irish income tax myths?.  At its core it contains misleading, highly selective and ultimately disingenuous arguments.  In short, it is bunk.  Let?s go through one of their main arguments and see where they are misinforming the debate.

Personal Taxation ? It is Lower than the EU Average

IBEC puts forward two graphs (Figures 2 and 3) to show that Irish personal taxation is much higher than in the EU-27.  This is an audacious presentation.  They use data selectively and exclude large parts of personal taxation.

(a)  Using GDP and GNP

IBEC produced the following calculations.

111According to IBEC, this proves that Irish personal taxation is higher than the average of the EU.  They further claim, that on these numbers, Irish ?taxpayers? are paying ?3 billion more than the EU average on a proportional basis.  The problem is that they are not comparing ?personal taxation?; they are comparing income tax. They exclude a large portion of personal taxation; namely, social insurance or PRSI.  In almost all other European countries, PRSI plays a much greater role than income tax.  In the EU, PRSI makes up 37 percent of total personal taxation; in Ireland, it makes up only 12 percent.  In seven countries, revenue from PRSI is higher than revenue from income tax.  In the Netherlands, income tax raises ?46 billion; social insurance, however, raises ?63 billion.

Not only did IBEC ?mould? the data around the conclusions they wanted, they also mixed the measurements to suit their argument.  When comparing GDP, they used an ?arithmetic? average for the EU.  However, when using GNP, they used a ?weighted? average.  The difference is that in the former, you average the individual percentage of each country; in the latter you add up all countries together and calculate the average. It allows IBEC to claim that income tax makes up 7.8 percent of GDP (arithmetic) whereas using the weighted measurement gives a figure of 9.4 percent.

Here?s the actual data ? using the weighted average.  All comparative data below is from Eurostat's Taxation Trends in the European Union 2014.

IBEC 2

On all these measurements, Ireland is well below average.  On GDP we?re below, but we know that much of our GDP is multi-national froth.  Using the Fiscal Council?s hybrid-GDP (which compromises between GDP and GNP), we?re still below average.  Even when using GNI which is essentially GNP, we remain below, though less so.

If we use adjusted GDP we?d have to pay ?3.6 billion more in personal taxation ? income tax and PRSI combined.  However, this isn?t the best measurement. (b)  A More Robust Measurement There?s a problem in using GDP and GNP.  If, after years of recession and austerity, GDP and GNP are depressed, then you will probably not be comparing like-with-like with countries that didn?t have such an experience (or not in the degree we had). There is a better measurement: the effective personal taxation rate.  This is the total amount of personal taxation revenue as a percentage of total wages and salaries.  The following is for employees (measuring the tax rate for self-employed is difficult as the data on self-employed income is limited) though it covers 83 percent of all those in work.
Jaime Dixon - Luan MFómh 29, 2014 15:47
The consumerism generated by capitalism throughout the  ?Developed? or ?Western? World is a major obstacle to tackling climate change, the biggest problem facing mankind.  So the next question must be: why is capitalism still so widely accepted?   Why do workers in the ?West? vote overwhelmingly for pro-capitalist parties? One of the less obvious features of capitalism is that by exponentially expanding its ?free? market into every corner of  life it puts a price on everything, and it thereby becomes a great social leveller: kings and lords, upper-class birthrights and privileges decline as possession of money, which by chance can be acquired by anyone, comes to measure everything.  As a result, other than the massive inequalities of money, we now live in a society with a level of personal equality that was unimaginable throughout  human history up to perhaps 40 years ago for gender, race, single mothers, LBGT, etc.  But crucially this equality drive of capitalism has always encouraged constantly growing agitation by workers for a just and equal economic share of their social production. They now see themselves as the social equals of their bosses, which causes desperate problems for capitalists.  Capitalism thereby lacks the acceptance of difference which earlier civilizations did, and which could last thousands of years in spite of vast degrees of inequality, class divisions, emperors, slavery, etc. England?s history demonstrates this capitalist dilemma. In response to the rapidly growing agitation the capital-owning class must react, like any ruling class, in two ways: some groups are violently repressed and exploited; some are bribed to keep them loyal. Thus colonies were plundered by Imperialism to deliver ?bribes? to English workers (noted in England by Engels1 ) finally resulting in the compromise of social democracy.    For example while the famine was devastating Ireland massive amounts of food were exported under British army guard to Liverpool. Violence was used in the 1819  Peterloo massacre of protesters.  But when Chartist agitation for equality  grew towards 1850, this time instead of violence the Corn Laws were ended to allow imports of cheap food to quieten the agitation. It is clear that most wars fought during Hobsbawm?s Age of Empire2  and continuing today were concerned with access to cheap labour,  food, raw materials, and later oil.  The home working class was comfortable enough to forgo  dangerous agitation, even gaining the vote over the years. But after 2 diverting world wars, which were much caused by imperial rivalry, in the 1970?s there arose further demands for economic equality by English workers (e.g. the miners strike) and also agitation by the colonies for their own liberty, for the equality of nations.  As there were no new colonies to invade Thatcher and others in the West had to find another source of wealth to answer this new agitation.
Michael Burke - Céad MFómh 24, 2014 16:31
The Irish recession which began in the final quarter of 2007 is the most severe in the history of the state. GDP contracted by 12.1% in a little over two years ending in the 4th quarter of 2009. That slump is not over. The latest data shows that the economy still remains 3.4% below its pre-recession peak. In effect it is likely to take 5 years or more simply to recover the output that was lost in the slump. Even then, the economy will remain way below its previous trend rate of growth. This is illustrated in Fig 1 below, which shows real GDP and real GNP from 1997 to the present. The average annual growth rate of the Irish economy from 1997 to 2007 was approximately 6%. Maintaining the trend rate of growth would have led the economy to be approximately 50% larger than it is currently, and there is a danger that this potential is lost permanently.

Fig.1 Medium-Term GDP & GNP

Fig.1 Medium-Term GDP & GNP The causes of the slump are very clear. Over the entire period of the crisis the fall in investment more than accounts for the entirety of the decline in aggregate measures of output, either GDP or GNP. GDP in the 2nd quarter of 2014 is still ?6.6bn below its late 2007 peak. Investment (Gross Fixed Capital Formation, GFCF) is ?14.4bn below its peak. There are other compoents of GDP which have also failed to recover, notably personal consumption and government expenditure. But even taken together, their combined fall of ?10.1bn is less than the fall in investment. The only component of GDP which has risen is net exports. The change in components of GDP is shown in Fig.2 below.

Fig.2 GDP & Components In the Slump. Source: CSO

Fig.2 GDP & Components In the Slump. Source: CSO This data belies the notion that there is an ?export-led recovery? under way. Recorded net exports have grown very strongly, up ?30.5bn over the period. But only one quarter of this or ?7.4bn is a rise in the export of goods. A much larger statistical contribution has arisen from the decline in the imports of goods, down ?14.6bn. As both investment and consumption have fallen, this simply suggests that both firms and households have been priced out of world markets by reduced purchasing power. The remainder of the rise in net exports is derived from international trade in services. These are particularly prone to the tax-induced flow of funds that plague the Irish economy and completely distort the economic data. There is little benefit from attempting to unravel them. More importantly, it is clear that exports have not led a broad-based recovery at all. All the main domestic indicators of activity, consumption, government spending and investment are still far below their pre-recession peaks.
Tom O'Brien - Céad MFómh 24, 2014 13:28
This week I am glad to welcome C. Derrick Varn back to the show. We discuss the council communism and the Ultra-left, a man who told Stalin where to go and survived, autonomous Marxism and the Occupy Movement, and the failure of revolutions. Enjoy! The music and voice used on this show are: ?The Order of the Pharaonic Jesters? by Sun Ra and his Arkestra Paul D'Amato discussing the life and work of Antonio Gramsci ?The Charleston? by Django Reinhart 'Working Class Hero' by John Lennon 'Destroy Everything' by Dr. Peacock & Repix 'Wild Colonial Boy' by Tommy Makem and The Clancy Brothers.
Rory Hearne - Máirt MFómh 23, 2014 09:44
Book Review: Spatial Justice and the Irish Crisis, eds: Gerry Kearns, David Meredith, and John Morrissey, Royal Irish Academy (2014)  The new book Spatial Justice and the Irish Crisis, edited by Gerry Kearns, David Meredith, and John Morrissey and published by the Royal Irish Academy is extremely timely given its extensive analysis and detail on the causes of the Irish financial crisis, its socio-spatial impacts on inequality and suggestions for alternative, social-justice based, economic development. The Irish elite, government, big business and media are trumpeting that ?austerity? and ?neoliberalism? have worked. The Irish economy is now fully in ?recovery? it is claimed, ?austerity? will be eased with tax breaks again to be given out to the middle classes, employment is rising and we have a mini property boom in Dublin to celebrate. Even potential social partnership agreements are floating in the political air. However, it is now more than ever that critical political, economic, and socio-spatial justice analysis of the Irish economy is required. Rather than cheerleading blindly into another boom and bust cycle based on inequality and spatial injustice there is a need for academics and policy makers to engage in rigorous analysis and reflection on the crisis and the political economic trajectory for the coming decades. Prof Gerry Kearns, of the Maynooth University Department of Geography, in the Introduction to the book, draws on President Higgins? reflection on the importance of ?critical thought? in the wake of ?failed orthodoxies?  as ?the crisis is one of ideas as well as of policy?. Now more than ever, space and time must be given in the academic and public sphere in Ireland to identify the causes of the crisis, its impact on inequality, and alternative (non-capitalist) policies and approaches based on the common good and social justice rather than the interests of the minority elite ? the 1%. This book does this by placing social and spatial justice as an urgent consideration in all areas of social and economic policy. Interestingly, Kearns highlights how government responses to the current crisis go against Articles contained in the Irish Constitution including commitments of the state to ?promot[ing] the welfare of the whole people by securing and protecting as effectively as it may a social order in which justice and charity shall inform all institutions of the national life? (Article 45.1). Significantly, this also includes ensuring that ?the ownership and control of the material resources may be so distributed amongst private individuals and the various classes as best to subserve the common good? (Article 45.2.ii). The book covers the origins of the financial crisis, its political and territorial implications such as the outsourcing of state power to international credit rating agencies, the links between crisis, housing and planning, the uneven impacts of the crisis in different parts of the country and unevenly within cities such as failed regeneration, impacts on equality of opportunity, marginalization of migrants, and sustainability. Within these areas it addresses the questions of spatial justice and where the pain of crisis and the opportunities of recovery are distributed, geographically and socially. It highlights the uneven development that was at the heart of the Celtic Tiger in the inequalities that persisted through that period, how they were worsened by the crash and the forms in which they continue today. The chapter by Prof Danny Dorling, Professor of Geography at the University of Oxford, on Spatial Justice, Housing and the Financial crisis makes important links between rising inequality and housing crises internationally. This chapter is very interesting for an Irish audience as it highlights how the current housing crisis in Ireland has similar causes to other countries and there is much we can learn in regard to social justice based responses. Dorling argues that ?we really need to think of housing again as a way in which we feel safe about where we are: not as a source of investment or a pension or something that can be used for profit, but instead as primarily a source of shelter?.  He offers suggestions to address this such as a mansions tax, rent control, and using second and third homes for housing for those who need it. He explains that ?housing is fundamental. It is what lies at the bottom of this crisis. Housing is one of the basic things that everybody needs and that policies can work out a way to guarantee.? He surmises that the reason this is not the case is because current policy appears to be ?trying to protect the equity interest of a small proportion of people who happen to own quite a lot of very expensive housing?.
Seán Sheehan - Déar MFómh 18, 2014 18:04

Book Review

Wittgenstein in Exile, James C. Klagge (MIT Press)

Groundless Grounds: A Study of Wittgenstein and Heidegger, Lee Braver (MIT Press)

  For James Klagge in his study of Wittgenstein and his philosophy, exile becomes a metaphor that help identify the enigmatic nature of his subject. Wittgenstein?s rootless, itinerant life was a crisscross of journeys across western Europe, from his home in Austria  to England, to Norway, to Ireland ? returning to Austria to teach children in a rural location, returning to England in 1929 (?God has arrived. I met him on the 5.15 train?, announced Maynard Keynes to his wife), returning to Norway to live. Always he travelled, as he lived, alone. He exiled himself from family, friends and academia and, given the strangeness of his temperament, exile serves as a description for his state of mind. Everyone feels alienated to some degree of other ? those who don?t are spooky or just plain numpties ? but Wittgenstein?s estrangement from the society and culture of his age was profound and the author?s understanding of this underlies what he writes about the man. Wittgenstein in Exile is enjoyable to read because it does not indulge in abstruse, intricate arguments and is mercifully free of the mind-numbing prose that results when the author of a book about philosophy solely addresses a professional audience of people assumed to share his interests. Klagge?s comfortable style of writing, reaching out to a wider readership, succeeds in presenting the peculiarity of a man who could not separate his philosophical work from the way he conducted his own life. Unable to avoid remorseless self-examination, Wittgenstein was an artist of the intellect not just in his writings but in his  relationship with the world and to demonstrate this Klagge draws considerably on reminiscences of those who knew Wittgenstein and who experienced in conversation aspects of his austere genius.
John Ross - Céad MFómh 17, 2014 12:24
This article was originally posted on John's blog Key Trends in Globalisation on the 2nd of September. 

Since 1978 China has seen the most rapid economic growth of any major country in world history, and the most rapid increase of living standards of any major economy. Furthermore, following the beginning of the international financial crisis, China far outperformed any other major economy ? in the seven years from 2ndquarter 2007 to 2nd quarter 2014 China?s economy grew by 78% and the US by 8%. In a single generation China has gone from a ?low income? economy to the verge of achieving ?high income? status by World Bank criteria.

This unprecedented economic development is sometimes explained in terms of unique ?Chinese characteristics?, but Western economic research over the last 30 years confirms that the reasons for China?s economic growth are rooted in universal economic processes. To be more precise, while the combination of global forces producing economic growth is unique in China, and produces unique ?Chinese characteristics?, the forces propelling China?s growth operate throughout the world economy.

These modern advances in Western measurement and analysis of the causes of economic growth have major implications for China. Some economists in China have claimed that its very rapid growth is ?aberrant? and not in conformity with economic theory. Instead, supposedly China must switch from a growth pattern based on high investment and exports to one based on productivity, more precisely Total Factor Productivity (TFP), growth. Unfortunately such arguments are based on economic methods and concepts that are 30 years out of date and which have been formally replaced by the UN, US and OECD.

Modern economic methods show that growth in the world economy, therefore including China, is fundamentally driven by high levels of investment and by globalisation, which is division of labour on an international scale. The aim of this article, therefore, is to outline the results of the most advanced Western economic methods and their implications for China. First a brief characterisation of the scale of China?s economic achievement will be given, as this establishes the fundamental implications of this for economic theory, and then the implications of modern Western economic research for understanding China?s growth will be analysed. In particular, attention will be given to the formally registered advances of measurement and understanding of economic growth in general, by international economic agencies, and to the most comprehensive application of these to the study of China and Asia?s economic growth ? Vu Minh Khuong?s masterpiece The Dynamics of Economic Growth: Policy Insights from Comparative Analyses in Asia.

Michael Taft - Máirt MFómh 16, 2014 13:48
Last night on Prime Time Brendan Burgess, from Ask About Money, stated that high-income earners in Ireland pay more tax than high earners in other countries. ?We have a very low direct tax economy in this country for the lower and the middle paid and very high taxes for the upper paid.  And that?s something people don?t appreciate.  And they need to appreciate that.? Let?s do some appreciation.  Are we a ?very low? direct tax economy?  Direct, or personal, taxes include income taxes, social insurance (PRSI) and other taxes on income such as Ireland?s Universal Social Charge or Germany?s surtax.

111a

We are low-tax, well below a lot of other countries.  But we are not that far behind the EU-15 weighted average, not that far behind ?high-tax? Sweden and ahead of another ?high-tax? economy, France.  So I don?t know that I would call it ?very low? but we certainly should be doing better. But what about that ?very high taxes for the upper paid??  We don?t have ?effective? tax rates for different income groups to compare (that is, the tax rate when all reliefs and deductions are taken into account).  We only have ?headline? tax rates ? which only include basic reliefs like personal tax credits.  But the following headline tax rates come from the OECD Benefit and Wages database.  The highest level of income for Ireland in the database is ?119,000 (a couple, both working) so I?ll use that to compare with the same level of income in other countries.

111b

Headline tax rates on Irish high-earners are well below most other countries.  If they were living in Germany they?d be paying ?11,000 more in income taxes and social insurance. There is caveat in this.  In Ireland, taxpayers get relief on pension contributions, mortgage interest, health insurance and a rake of business investments.  Do taxpayers have access to the same level of reliefs and allowances?  More?  Less?  We don?t have easily accessible comparable data.  (Also, the tax rate for Italy in the above chart is for ?107,000 ? the highest level of income in the OECD database). However, when looking at headline rate, Irish high-earners are not over-taxed in comparative terms. And there are some further explanations needed (the type of explanations that rarely get a hearing on current affairs programmes).  Take the example of Sweden.  The chart above shows Swedish headline rates lower than Ireland.  In the first total direct taxation chart, Sweden is only slightly above Ireland.  Some might find this surprising since we all think of Sweden as high-taxed.
Irish Left Review - Máirt MFómh 16, 2014 13:36
The September Socialist Voice is now available online  List of articles in this issue Illusions of recovery In early September the minister for public expenditure, Brendan Howlin, claimed that the Government?s economic strategy was so successful that ?we?re not going back to boom and bust.? But he is not the first social democrat, and no doubt will not be the last, to make that grandiose claim. Slump and boom are inherent in the capitalist system, and recurrent crises cannot be prevented within capitalism but only by defeating capitalism itself. Capitalism is prone to sequences of slump and boom, coupled with wild financial speculation and property and asset bubbles. It simply cannot exist otherwise. Guests of the nation Being a theoretical journal with an unambiguous world view, Socialist Voice places less emphasis on the type of investigative journalism that features prominently in more commercially inclined publications. Nevertheless there is a role for this method of news-gathering and especially when an intriguing rumour is begging for authentication. Suffer Little Children The United States is one of three countries that have failed to ratify the UN Convention on the Rights of the Child. In this it finds itself in the august company of Somalia and South Sudan. Somalia, however, has committed itself to ratifying, and South Sudan?s parliament has passed a bill to do so. To be fair, it has to be said that the United States played an active role in the drafting of the bill, and has actually signed, though not ratified, it. Among the reasons given is the fear of a backlash from the religious right, who see the bill as an assault on their rights. The Republican Congress eighty years on: A relevant or redundant concept? Like any organisation, the Republican Congress was a product of its time and place; therefore we need to understand it on its own terms and in the historical conditions of the time. Ireland eighty years later is a different place from the Ireland of the 1920s and 30s. The world is different, and the balance of forces has shifted. We need to consider such factors as the deep economic crisis of the system at the time, which had a huge impact on Ireland. Unemployment in the South stood at more than a quarter of a million; there was mass emigration, widespread poverty, and evictions from farms and homes. A stark class divide A recent report from the Higher Education Authority reveals a stark class divide in Dublin when it comes to access to higher education. The report confirms what all socialists already knew: that teenagers from the leafy middle-class suburbs are far more likely to go on to third-level education than those from less privileged areas of the city. Lance Armstrong should keep his jerseys In July, RTE featured a documentary on Paul Kimmage, the sports journalist. He was portrayed as the journalist who exposed Lance Armstrong as a cheat, and was one of the main journalists who campaigned about the use of drugs in professional cycling. There is no doubt that Kimmage is a unique journalist, and in fact he is one of the small number of people?never mind journalists?who actually completed a Tour de France when he was a professional cyclist. He could have completed a second Tour but withdrew. This still seems to be a source of regret to him. Political statement National Executive Committee, Communist Party of Ireland The National Executive Committee of the Communist Party of Ireland expresses its solidarity with workers now engaged in industrial struggles to defend their livelihood. Iarnród Éireann workers are struggling to prevent a cut in wages arising out of Government policy, which is to to run down the rail service, and public transport in general, in the interests of privately owned companies, to shift the burden of running public transport onto the workers and travelling public, and to remove the state from any meaningful social responsibility for providing a comprehensive public transport service. Whoop it up for freedom! René González, the first of the Cuban Five to be released, was due to speak at meetings in Liverpool and London to mark the sixteenth anniversary of their arrest. Who really owns us? It was announced last month that the value of Government bonds at the end of last May was ?113.216 billion?120 per cent of the value of the country?s annual economic output. 53 per cent of these bonds are held by foreign individuals and institutions. Along with Portugal, Ireland is one of the EU?s most indebted countries, and it has recently taken to share-switching to stave off an inability to pay its creditors. Short-term bonds due to be cashed in in 2016 are swapped for ten-year bonds, and so the evil day is postponed. O?Flaherty Summer School a huge success Féile na bhFlaitheartach, 2014?the Liam and Tom O?Flaherty Society?s August summer school?was a fantastic weekend, richly rewarding for all who made it to Árainn. The school opened with a talk by Theo Dorgan on the horrific industrial slaughter that was the First World War, making the point that if it were not for the literary records of the brutality and horrors of this war in books such as Liam O?Flaherty?s Return of the Brute later generations could be more easily duped by politicians and the the media into believing there was something heroic in it. On Tom Gilmartin Frank Connolly, Tom Gilmartin: The Man Who Brought Down a Taoiseach and Exposed the Corruption and Greed at the Heart of Irish Politics (Dublin: Gill and Macmillan, 2014); ISBN 978-0-7171-6047-1; ?16.99 / £14.99. Níl siad imithe uainn fós, bíodh a fhios agat?polaiteoirí, baincéirí, lucht forbartha, agus infheisteoirí cama, ná na fórsaí taobh thiar díobh. Ná níl scéal Bhinse Flood/Mahon thart go fóill, mar a mheabhraigh cúis George Redmond sa Chúirt Uachtarach dúinn i mí Iúil. Bratacha Bána Gabriel Rosenstock The pigs are back! Tomás Mac Síomóin, Is Stacey Pregnant? Notes from the Irish Dystopia (Nuascéalta, 2014; ISBN 978-1-4992-1354-6; $10.75). Available from Amazon, Connolly Books, and general booksellers. Anybody familiar with Orwell?s Animal Farm will be amused by Tomás Mac Síomóin?s rebirth of the pig as the ?Smilin? Porky? in his newly published novel Is Stacey Pregnant??although the amusement will not last long as this novel gradually unfolds its horror! The first expressionist play in Irish Expressionism is an art form that developed fully in Germany in the years before the First World War (in painting, poetry and drama) and after the war in German cinema. It arose from a sense of existential fear and a world going out of control. Its themes are very often psychological struggle, insanity, and unfathomable forces controlling people?s lives. Mainstream bourgeois aesthetics of outward objectivity are rejected in favour of the aesthetics of ugliness as the way these artists perceived their reality in the build-up for war and following it, right through the 1920s.

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