Increased borrowing, increases in a range of taxes and an end to the “help-to-buy” scheme are among recommendations to Government as it frames next month’s budget, from a leading equality think tank.
Social Justice Ireland (SJI) says in a post-Covid-19 world the established focus on reducing the national debt has to change. Concerted government investment is vital, it says, calling for a massive increase in spending on social housing, in health and in poverty-reduction measures.
“Promoting economic growth in the hope that other positive developments will follow is not enough.” This is possible as interest rates are so low.
“Social Justice Ireland’s message on Budget 2021 is simple: Lock in this cheap money for as long a timeframe as possible; do what already needed to be done on poverty and social exclusion, housing and health, just transition, and other infrastructure investment; and park the costs as cheap borrowing to be run down over several decades.”
Describing Budget 2021 as a “moment of opportunity”, the charity says a “broad and equitable tax base” should include a commitment to an effective corporation tax rate of 6 per cent; a €200 per month levy on empty houses; and a site-value tax on undeveloped land, abandoned urban centres and land banks of zoned land, to replace the vacant sites levy.
It calls for an increase in tax on online and in-shop gambling to 3 per cent; an increase in the minimum effective tax rate for those earning more than €400,000 a year from 30 to 35 per cent; an increase in both capital gains tax and capital acquisitions tax from 33 to 35 per cent; restoration of second homes charge to €500 a year; increases in stamp duties, and the introduction of refundable tax credits for those who do not earn enough to avail of tax credits.
Windfall profits from rezoned land should be taxed and the Government should step up international support for a financial transaction tax.
“Terminate the Help to Buy Scheme,” says SJI, and use the €75 million saved to invest in homelessness prevention.
“Government should seek to emulate best practice in other European countries and increase social housing to 20 per cent of all housing stock. (It is currently nine per cent). To do this, Government must retain State ownership of State land suitable for residential development for social housing provision.”
Minimum social welfare rates must be benchmarked to equal 27.5 per cent of average earnings, with core rates increased by €7 a week, in each of the next three budgets, says SJI.