In spite of tight budgetary situation there are still a number of options for the economy
A group of Fine Gael backbenchers set out their position on taxes and spending in the budget
Related to this, a third option involves a reduction in the planned austerity in 2014, but for a specific purpose. That purpose would be to invest in stimulus that would have immediate employment benefits. Therefore, we are not advocating an easing in spending reduction targets and tax measures; underlying deficit reduction targets must still be achieved.
Instead, this money would be invested in areas like home improvement grants, or shovel-ready projects in transport and education – the kind of capital investment that delivers economic gains for decades after the original investment. A fourth option would be a blend of options two and three (a mix of reduced cuts and stimulus) and may well be the only option that builds consensus in the Coalition.
Our preference is for option three: to move towards a more sustainable national financial position while using this improved position to borrow for investment in a stimulus programme.
Considering what cuts to make in achieving the €3.1 billion correction is made more difficult by the absence of detailed, impartial information and a dedicated forum in which to debate the specifics of budgetary policy. We renew our call for a new budgetary scrutiny committee, similar to the non-partisan Congressional Budget Office in the US, to assist Dáil members in considering budgetary matters on a year-round basis. We hope to see this implemented by the Government as part of its Dáil reform.
We also believe it is important that we, as members of the Government, further the principles of tax transparency and provide a cost effective mechanism whereby taxpayers can receive an indicative breakdown of how the Government spends their taxes, each year.
With regard to the central issue of taxation, it is our belief that there should be no new taxes or tax increases for the employed in 2014. The property tax will have its first full year of payment next year with water charges not far behind. Taxes on earnings have reached their ceiling and the burden on taxpayers is now too high.
Ireland has the most progressive (ie fairest) tax system in the OECD, excluding Israel – the top 5 per cent of earners pay 44 per cent of taxes, despite earning only 24 per cent of overall gross income. ESRI analysis shows that over the period of austerity from 2009 to 2013, tax and spending measures have been progressive, with those on higher incomes shouldering the greater burden of the adjustment. There is no argument for higher taxes.
We put this position out now in this way because we believe that open and honest debate around the options that face us is preferable to closed party meetings and ministerial kite-flying.
This article was written by Sean Conlan TD, Paul Connaughton TD, Pat Deering TD, Brendan Griffin TD, Noel Harrington TD, Sean Kyne TD, Anthony Lawlor TD, Eoghan Murphy TD, all of Fine Gael.