There is little or no tax benefit from Budget 2018 for 1.5 million income earners on less than €35,000, the joint leader of the Social Democrats Róisín Shortall TD said today.
Speaking in the Dáil, Deputy Shortall said:
“Yesterday’s budget represented a scatter gun approach to the country’s finances. It lacked any kind of vision or strategy. It was a missed opportunity to set the country on a fair and sustainable course and the emphasis on tax cutting is deeply regressive and very much widens the gap between the haves and have nots.
“It wasn’t by chance that Fine Gael and Fianna Fáil spent the past few weeks scrapping about tax cuts. This has served as a major distraction from the big problems facing the country, most notably in housing and in health.
“Let’s take a look at what happened to tax on income. It’s first important to remind ourselves that much of income earners earn less than €35,000. In fact, 58% have incomes of less than €35,000. We frequently hear the Taoiseach and Ministers talk about people on €60-70,000 as middle-income earners but this is entirely inaccurate.
“So, for those 1.5m income earners there is little or no tax benefit from the budget. It’s interesting to note that in the Department’s Tax Policy Change document, of the ten examples shown, only two of the households earn less than €35,000. Also, in today’s, Irish times only one of the fictional households looked at earn less than €35,000 and that’s a student.
“On last night’s Prime Time programme we heard from the wife of a soldier whose family will gain just €1.35 per week. That’s an insult to any family on the true middle wage. So, for the Taoiseach to claim that everyone benefits is simply not true.”
Deputy Shortall added:
“Rather than tax cuts which benefit the better off, the Government could have targeting the high cost of living for families. The Government could have tackled the high cost of insurance, reduced the price of transport fares, controlled the cost of housing and health, or introduced free primary education for example. Not only would this approach have benefited all households, it would have been a lot fairer and a lot more sustainable.”
Deputy Shortall said the cost of healthcare was one of the biggest burdens on families whether that is those on medical cards or for those paying high health insurance.
“The Sláintecare reform programme sets out a plan to cut waiting lists, remove charges and introduce a universal public health service. It’s disappointing that the government has failed to provide the necessary funding to fully implement phase 1 of Sláintecare for next year. We have yet to hear the precise details of the health budget but it is clear that the allocation falls very far short of what is required,” she added.
Turning to the Budget’s impact on the ‘locked out generation’ of young people facing job precarity and housing insecurity, Deputy Shortall said:
“By trying to claim you have done something for everyone, you have ignored those who needed your help this most. This morning, the Taoiseach said that these policies would allow the next generation to be free from the burden of excessive debt so they can build their lives here. How do you expect them to do this when they continue to be locked out of the things most members of this house took for granted?
“They are the generation who cannot afford housing or to start a family. They are the generation who find themselves in precarious work and have been treated disgracefully by the FEMPI cuts. So is particularly disappointing that nothing has been done to target the challenges faced by the young people who have borne the brunt of the enormous debts the middle age and older generations have saddled them with. Nothing has been done to address the two-tiered pay scales which apply to new entrant to the public service.”
ENDS
11th October 2017
Notes to Editors:
Deputy Shortall’s full Dáil speech is below
Yesterday’s budget represented a scatter gun approach to the country’s finances. It lacked any kind of vision or strategy. It was a missed opportunity to set the country on a fair and sustainable course and the emphasis on tax cutting is deeply regressive and very much widens the gap between the haves and have-nots.
It wasn’t by chance that Fine Gael and Fianna Fáil spent the past few weeks scrapping about tax cuts. This has served as a major distraction from the big problems facing the country, most notably in housing and in health.
Let’s take a look at what happened to tax on income. It’s first important to remind ourselves that much of income earners earn less than €35,000. In fact, 58% have incomes of less than €35,000. We frequently hear the Taoiseach and Ministers talk about people on €60-70,000 as middle-income earners but this is entirely inaccurate.
So, for those 1.5m income earners there is little or no tax benefit from the budget. It’s interesting to note that in the Department’s Tax Policy Change document, of the ten examples shown, only two of the households earn less than €35,000. Also, in today’s, Irish times only one of the fictional households looked at earn less than €35,000 and that’s a student.
On last night’s Prime Time programme we heard from the wife of a soldier whose family will gain just €1.35 per week. That’s an insult to any family on the true middle wage. So, for the Taoiseach to claim that everyone benefits is simply not true.”
Rather than tax cuts which benefit the better off, the Government could have targeting the high cost of living for families. The Government could have tackled the high cost of insurance, reduced the price of transport fares, controlled the cost of housing and health, or introduced free primary education for example. Not only would this approach have benefitted all households, it would have been a lot fairer and a lot more sustainable.
Health
The cost of healthcare is one of the biggest burdens on families whether that is those on medical cards or for those paying high health insurance. The Sláintecare reform programme sets out a plan to cut waiting lists, remove charges and introduce a universal public health service. It’s disappointing that the government has failed to provide the necessary funding to fully implement phase 1 of Sláintecare for next year.
We have yet to hear the precise details of the health budget but it is clear that the allocation falls very far short of what is required. I am also concerned about the capital allocation in health. Sláintecare recommended an investment of 500m in capital expenditure to catch up with the underspend during the austerity years, to provide the primary care centres and ICT that is so necessary in health. It is impossible to get reliable data and without this there cannot be fair and effective allocation of resources nor can there be adequate performance management. Investing now in the eHealth programme would bring significant saving later.
Instead the Government is relying on a stop gap measure in the National Treatment Purchase Fund. There is little to indicate a commitment to real reform. We need to move beyond this kind of knee-jerk response to waiting lists and put in place the kind of system change which Sláintecare sets out.
Housing
Whether renting, buying, or on a social housing waiting list, housing represents the biggest costs for people. Yet, this budget fails to introduce an affordable housing scheme, to control rents, or to fund an adequate number of social houses.
The measures outlined yesterday are not sufficient to make an appreciable difference to the housing crisis. For the most part the Government used it as an opportunity to re-announce house building figures that we have known for weeks.
Once again, the main people who will benefit from your housing policy are developers and landlords. This is yet another budget with far too much carrot, and not enough stick.
Take for example the vacant site levy, probably the headline policy from your announcement yesterday. You’ve introduced an increase to 7% at a time when the price of land is rising at around twice that rate. Why should we assume these companies will not simply weigh up the cost of this tax against the greater benefit they can reap from rising prices and do nothing?
Land hoarding has been a central factor in the lack of supply and the lack of affordability of housing. Both this and the last Government have completely failed to tackle this. The tokenistic vacant site levy lacks teeth and if the Government were serious about driving down the cost of housing they would have announced an effective land hoarding strategy for 2018.
Childcare
Some of the improvements in relation to childcare are to be welcomed. Particularly additional supports for the formal childcare sector, and the commitment to improved early years inspections. However, there doesn’t seems to be any attempt to address the root causes of the sustainability crisis in the sector.
We all talk about raising standards, but the sectors economic model ties the hands of providers, restrict quality and limits childcare workers terms and conditions and career progression. It is absurd that well trained early years educators are still forced to sign on during the summer months.
I know the Minister has commissioned an assessment of the economic cost of quality childcare, but this is not due until late next year. I believe the Minister should fast track this report.
It is also particularly disappointing that there is no mention of paid parental leave as promised in the Programme for Government. Ireland has the poorest provision of paid parental leave. We should be ensuring that all children can be cared for in the home for at least the first year. Equally there is no financial assistance available for the majority working parents, over 70% of who use the non-formal childcare system and we should have seen an early years payment for this.
Lone Parents
Nor was anything done to address the impact of successive regressive budgets on one of the groups at greatest risk of poverty and most affected by the cost of childcare; lone parents. Only on Monday this week, the Department of Social Protection published the Indecon study on the impact of the changes to the One Parent Family Payment. It found significant increases in deprivation among lone parent families after losing the One Parent Family Payment. And yet very little has been done to address the huge, often disproportionate, costs lone parents face.
It is nonsense to claim it has reduced the dependency on welfare in a situation where welfare was cut off. There are many benefits to parents accessing education, training and work. But their children should not be paying a price for this. We were promised Scandinavian style childcare for these families and Government should either fund this or reverse the cuts to the One Parent Family Payment.
Locked Out Generation
By trying to claim you have done something for everyone, you have ignored those who needed your help this most. This morning, the Taoiseach said that these policies would allow the next generation to be free from the burden of excessive debt so they can build their lives here. How do you expect them to do this when they continue to be locked out of the things most members of this house took for granted? They are the generation who cannot afford housing or to start a family. They are the generation who find themselves in precarious work and have been treated disgracefully by the FEMPI cuts. So is particularly disappointing that nothing has been done to target the challenges faced by the young people who have borne the brunt of the enormous debts the middle age and older generations have saddled them with. Nothing has been done to address the two-tiered pay scales which apply to new entrant to the public service.
Pensioners
The budget was also a disappointment to the many women approaching pension age who continue to be denied access to a full state pension because of cuts introduced in 2012. It is unacceptable that these women continue to be punished for leaving the workforce or a time to provide care work, or were forced out due to the marriage ban.
ENDS