CPA gives Budget guarded welcome

The Combat Poverty Agency (CPA) has given a guarded welcome to Budget 2008, saying the bottom fifth of earners are marginally better off as a result.

In its Budget 2008 analysis, released today, the CPA commended Minister for Finance Brian Cowen for helping those most at risk of severe poverty, despite the fact funding available in Budget 2008 for tax and welfare changes was €1.6 billion, down over €1 billion or 41 per cent, on the previous year.

"Greater priority was given to welfare support at a time of reduced resources," the CPA said. "In percentage terms this translates into a greater gain for those on lower incomes."

The agency said the lowest 20 per cent in terms of household income gained on average between 1 and 1.5 per cent under the provisions of the budget. This is compared to an overall average gain across all income bands of around 0.1 per cent.

It said the fall in income poverty for those at or below 50 per cent of average income - set at €229 per week in cash terms - was 11.5 per cent over the previous year. Older people, particularly women, gained most from Budget 2008.

However, those people earning 60 or 70 per cent of the average wage saw little benefit, the CPA said.

Overall, there was also little in the Budget to help alleviate the rate of child poverty, it added. This is despite the fact the spend on child welfare support went up from 9 per cent of the total available in 2007 to 12 per cent this year.

It noted that spending on social welfare was down €410 million over Budget 2007; spending on income tax was down €670 million and spending on child income support was down €50 million. Overall, however, the proportion of the total money available that was spent on social welfare was up to 46 per cent from 42 per cent the previous year.

The CPA is a statutory body established in 1986 to advise the Government on strategies to reduce poverty in Ireland.