Social Democrats propose €5 billion for Green transformation fund

The Social Democrats have called for additional Government borrowing of almost €6.7 billion in 2022, mainly through a €5 billion spend on a new Green transformation fund.

In its pre-budget submission, the party has said the new fund should be used to invest in decarbonising Irish society, particularly in the area of renewable energy.

Its aim would “be to make Ireland a net exporter of energy in the years to come,” the party says in its document.

The party also has ambitious spending increases for housing (€1 billion), for health (€1.5 billion) and for social protection (€955 million). Like Sinn Féin, the Social Democrats seek to build an additional 20,000 social and affordable houses in 2022.

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It has also provided a total of €1.5 billion for the development of Sláintecare in its proposal.

The gross increase in spending is over €10 billion with the addition of the green transformation fund. That will be partially offset by the party’s proposals to raise some €2.67 billion in new revenue.

The biggest single item in this is a reform of the corporation tax system setting a minimum effective rate of 6 per cent. The party says it will raise over €1 billion in 2022 with this change.

A change to the cap on capital allowances against intangible assets would be applied and this would yield a once-off take of €500 million in 2022.

The party says that the Government cannot return to austerity in the wake of Covid.

“In short, this must be a budget of ambition, not bookkeeping. The pandemic has presented a window of opportunity where bold moves can be made to tackle the crisis Ireland faces, around housing, public service provision, the climate emergency, and others.

This can be done, if the Government is guided by the principles and proposals laid out in this Alternative Budget.

“The overarching budgetary principle of Budget 2022 should be acknowledgement that there is no need for immediate fiscal contraction to bring the budget back into balance,” it states.

It adds: “Avoiding another round of Fianna Fáil/Fine Gael-led austerity is not enough. Despite all the lessons you would have expected the Government to have learned, there still appears to be an underlying urge to return to the ‘old normal’ of a low tax and low spend model with the inevitable underfunding of essential public services that goes with this.”