Budget 'will hit children and working poor'

Children and the working poor were the big losers from a Budget that failed to adequately protect the vulnerable, it was claimed today.

The Cori Justice Commission, a member of the community and voluntary pillar in the social partnership talks, said this happened despite the fact that the distribution of resources in the Budget was “very progressive”, with the only net beneficiaries being recipients of social welfare payments.

Publishing the group’s critique of the Budget, director Fr Seán Healy said 30 per cent of all households at risk of poverty were headed by a person with a job, and many of these “working poor” paid no tax this year because their incomes were outside the tax net. But the imposition of the new one per cent levy now meant that an individual or couple earning €15,000 would be €150 worse off next year.

“The introduction of an income levy means that people at or below the minimum wage who were outside the tax net in previous years now find themselves paying tax from their already very meagre income - an income that is below the poverty line in many cases,” Fr Healy said.

“Increasing the tax bands was not the most progressive way to use the available resources as they go only to those above the thresholds. Using this money to increase tax credits would have meant that all tax-payers would have benefited - not just those with incomes large enough to pay the higher tax rate.”

On children, Cori said the failure to raise child benefit meant the value of the payment would fall by 2.5 per cent in real terms in 2009, and predicted the changes introduced in the Budget would not lead to a reduction in child poverty.

Fr Healy said: “Budget 2009 did not protect the vulnerable. The working poor and children are big losers. Other social welfare recipients will also be worse off in real terms in the coming year.”

“This happened despite the fact that the distribution of resources in Budget 2009 was very progressive with the only net beneficiaries being people in receipt of social welfare payments - all other groups will in fact lose out.”

While the Government had shown commendable commitment to the fair allocation of resources by making social welfare recipients the only beneficiaries of the Budget, “it would have been far more effective if Government had ensured the ‘working poor’ did not lose from the choices they made,” he added.

Cori welcomed a number of initiatives announced in the Budget, including the commitment to develop 200 primary care teams in the next two years and the allocation to social housing programmes.

The group also welcomed the Budget’s environmental initiatives in areas such as motor taxation, water services and energy efficiency. It said it looked forward to the development of a carbon tax and accompanying measures to protect the vulnerable.