Welfare hike, childcare cap and SUV tax among Labour’s €11bn budget proposals

An immediate €15 hike in weekly social welfare payments, a €200 cap on childcare costs, an SUV tax and a monthly €9 “climate ticket” for public transport are among proposals in a Labour Party alternative budget package worth almost €11 billion.

At a press conference in Dublin, party leader Ivana Bacik said it includes “radical and realistic” priorities, arguing it is a budget “to create an equal Ireland”.

Finance spokesman Ged Nash said the Labour proposals would “give people instant relief” amid the cost-of-living crisis before Christmas “coupled with a long-term sustainable plan to slash inequality”.

He said there would be €3 billion worth of cost-of-living measures in a Labour budget including an immediate €15 increase in weekly welfare payments, later to rise to €27.50 on a phased basis over the course of 2024.

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There would be a Christmas child benefit double payment costing €170 million and a one-off €250 November fuel allowance payment costing €101 million.

Ms Bacik said the €200 cap on childcare costs would be brought in as “no parent should have to pay more than that”.

She said such a measure would be a “stepping stone” towards a “universal and publicly funded childcare model”.

Labour would spend some €65 million in 2024 on pilot schemes for universal public childcare with a goal of providing between 5,000 and 6,000 places in areas with a shortage of childcare capacity.

In climate measures one proposal is to introduce an “SUV/car bloat tax based on weight and size”, though the revenues that could be brought in with such a tax are not detailed.

Mr Nash said: “It was very difficult to get a costing on the technical points that are involved in developing a proposition like that.” But he said the party would like to develop the idea in time for its election manifesto.

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The main climate action proposal is a €9 per month “climate ticket” for unlimited public transport in Ireland estimated to cost €330 million over a full year.

The idea is similar to a temporary scheme introduced in Germany, where reports suggest public transport use increased considerably, particularly for leisure travel, while car usage did not significantly decline. The price there was later increased to €49.

Put to him that the €9 ticket would backfire in Ireland under Labour’s unlimited proposal, given already-crowded public transport, Mr Nash said “radical interventions are required”.

He said train services are busy but there is more rolling stock coming on stream.

Ms Bacik said that, based on the German experience, 23,000 cars could be taken off the road here if the ticket was introduced.

She said Labour’s proposals include increasing pay for bus and train drivers to help increase recruitment as this is an inhibitor to growing public transport.

The alternative budget document also includes a €1.6 billion capital programme to deliver homes and a €90 million emergency empty homes fund to bring derelict and vacant buildings back into use.