Campaigning group urges protection of poor in budget

Tue, Oct 2, 2012, 01:00

NATIONAL CAMPAIGNING group Social Justice Ireland has urged the Government not to favour the rich at the expense of the poor in the budget.

The Government’s approach to resolving the State’s economic crisis involved protecting the rich at the expense of the rest of the population, according to the director of Social Justice Ireland (SJI), Fr Seán Healy.

Speaking yesterday at the launch of the group’s policy briefing on budget choices, he said the Government had the freedom to make choices in Budget 2013 that would impact less severely on the poor.

He said it was “untrue that choices are being imposed by the IMF”.

The International Monetary Fund, he said, had no problem with Ireland taking a different approach to saving the €3.5 billion required under the bailout programme.

Fr Healy said the model employed by the Government to achieve the agreed benchmarks was flawed.

“Ireland has been implementing the terms of the bailout but the benefits have not followed,” he said, noting the increase in long-term unemployment and emigration.

If the Government continued to implement the current system “a generation will be lost”.

In its proposals, the SJI called for a major investment programme; protection of public services; a tax system that collects up to 35 per cent of GDP; and “a fairer distribution of the ‘hits’ in the budget”.

It said tax increases and expenditure reductions should be carried out on a ratio of two to one.

The document proposes the introduction of a universal pension payment for everyone over 65. This would be set at €230.30, the level of the contributory old age pension, and would replace the current old age pension.

SJI recommends introducing a 2.5 per cent levy on all corporate profits, which it estimates would yield €750 million in taxation revenue in 2013.

When asked about the possibility of such a charge discouraging foreign direct investment, Fr Healy said many companies in Ireland used loopholes to avoid paying the full 12.5 per cent rate of corporation tax and that an extra 2.5 per cent levy on profits “would not stretch them too much”.

He urged the Government to scrap the household charge, which he called “totally unjust” and instead adopt a site valuation tax. This, he said, would bring in an additional €340 million in 2013. This tax could be introduced within six months using pre-existing information.

The document also called for the establishment of a part-time job opportunities programme, modelled on a similar programme piloted in 1994-1998. Initially this would receive funding of €50 million which would increase if the scheme reduced the unemployment figure by 100,000.

Elsewhere, the document says an off-balance sheet investment package of €7 billion would “address some of the social and infrastructural deficits which remain in Ireland”.

This fund would receive capital from the national pension reserve fund, credit unions, capital market borrowing, and the European Investment Bank and Council of Europe Bank.

BUDGET PROPOSAL KEY POINTS

The current approach to resolving Ireland’s series of crises is not working.

This situation has been exacerbated by the Government’s protection of the rich at the expense of the rest of the people.

Budget 2013 should provide a major investment programme and protect public services.

It should also make the tax system fairer and distribute the “hits” fairly.

All of this can be done while reducing borrowing by €3.5 billion in 2013.