Sinn Féin proposes additional €3.5bn in budget spending

Sinn Féin has proposed an additional €3.5 billion on top of the Government’s proposed expenditure for Budget 2022, with a promise to build 20,000 social and affordable homes next year and provide more than 900 new hospital beds.

The party on Thursday published its pre-budget submission which includes a range of spending measures and promises to allow people to retire at 65, reduce healthcare waiting lists, cut rents and greatly bring down childcare costs.

Sinn Féin said it would not increase carbon tax in the budget and would get rid of the property tax.

The party said it would partially fund the increased spending with a series of “progressive tax measures”. These include tax hikes aimed at higher earners and not introducing any of the tax cuts or changes to tax bands proposed by the Government, which it says would bring in an additional €2 billion.

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Party leader Mary Lou McDonald said Sinn Féin’s alternative budget put workers and families first.

She said next Tuesday’s budget would be the sixth delivered by what she called the “Fianna Fáil-Fine Gael partnership”.

“They are out of touch, out of ideas and out of time,” she said.

She was accompanied at the launch by party finance spokesman Pearse Doherty and public expenditure spokeswoman Mairéad Farrell.

Mr Doherty said: “This is a plan that will deliver real change, prioritising the things that ensure workers and families can live good and prosperous lives and look to the future with hope.”

The two biggest spending increases proposed by the party are the promise to deliver 932 extra beds in hospitals and mental health facilities at a cost of some €500 million, as well as its promise to deliver 12,000 social homes, 4,000 affordable rental homes and 4,000 affordable purchase homes by the end of next year. The cost of providing the 20,000 homes would be more than €3 billion, of which €1.62 billion would be additional spending.

No additional borrowings

The submission does not propose any additional borrowing for current expenditure as increases would be offset by tax increases. However, there would be an additional net increase in capital spending of €1.5 billion, which would bring the State’s deficit to 3.7 per cent of GDP next year.

The submission argues that the “State is in a strong position to debt-finance investments that increase the productive capacity and competitiveness of our economy and the urgency of delivery in the fields of housing and health”.

On the revenue side, there is a list of tax increases aimed at higher earners that it says will result in more than €1.9 billion of increased revenue.

It proposes to remove tax credits on a tapered basis on individual incomes above €100,000, as well as a 3 per cent “solidarity tax” on individual incomes above €140,000. The measures, its says, would collectively yield €408 million next year.

A 40 per cent capital gains tax rate on individual incomes above €500,000 is also proposed, as well as an increase in the capital acquisition tax to 36 per cent.

The abolition of local property tax is partially compensated for by a series of duties and taxes for more valuable properties. Stamp duty would be increased to 2 per cent for houses worth €700,000 or more and to 5 per cent for properties worth €1 million or more. A second home charge of €400 would also be introduced.

The party’s long-standing policy of a wealth tax for net wealth above €1 million, which excludes farms, is also included. The party proposes an increase of 2.2 per cent in employers’ PRSI on the portion of salaries above €100,000.