Introducing a millionaires tax, phasing out the special rate of Vat for the hospitality sector and scrapping the help to buy scheme have all been suggested by opposition parties ahead of the Budget, writes Elaine Loughlin.
The Social Democrats, Green Party and Solidarity-PBP all launched alternative plans yesterday ahead of next Tuesday’s Budget.
While the Social Democrats believe tax bands should not be changed and instead money should be injected into bettering health, education and other public services, on the other hand Solidarity-PBP would introduce a millionaires tax as well as a number of new tax bands for those earning €100,000 or more.
The Green Party believe cuts to USC or income tax — both of which are now expected to be implemented as part of Budget 2018 — would be irresponsible.
Greens seek to restore levels of dole for young unemployed
By Juno McEnroe
The Green Party has proposed a €1.5bn spend next year in its alternative budget, which includes restoring levels of dole for the young unemployed and piloting a town project where everyone, rich and poor, would get a basic €200 weekly income.
Party leader Eamon Ryan said towns are “dying” across Ireland and that the project has worked successfully in Finland and the US. Towns here would apply to win the scheme, he said. “International analysis we read says that when it comes to cracking poverty, the best way is to give people a basic safety net,” he said.
The party says: “The trial would be set for a number of years to ensure the costs and benefits could be assessed on a scientific basis with the lessons then being applied to the entire country.”
The Greens also propose increasing Irish aid; scrapping the €70m help-to-buy scheme; and putting €300m into third-level education,
While the party said cuts to USC or income tax would be irresponsible, it wants to end corporation tax breaks, introduce a site-value tax, and abolish the low 9% Vat rate for the tourism sector. The latter move would return almost €500m to the exchequer, it says.
Defending proposals to restore dole amounts for people under the age of 26, Mr Ryan said the country is “not broke now” and there are young people and artists genuinely broke or between jobs.
In line with recommendations by the Union of Students in Ireland and the National Youth Council of Ireland, the Greens would restore the full rate of social welfare payments at a cost of €149m. The Greens also want 10% of the transport budget ringfenced for cycling.
Overall, it proposes €866m in new revenue-raising measures on top of what it claims is the €650m in fiscal space for the budget.
The Greens want to invest almost €300m into backdating homemakers’ scheme payments for pension entitlements where people care for a child or an ill or disabled person. Refundable tax credits would be increased through a €140m fund while mental health would get an extra €55m.
The Greens have also suggested that more grants be given out for solar panels and that there be an equalising of the cost of diesel and petrol. The Government is understood to be looking at the latter move, which could see more tax slapped on the cost of diesel.
The Greens want to create clean energy industries in the midlands for Bord na Móna workers; more support for agri-environment schemes; more cycling greenways; as well as more public electric vehicle charging points.
The party also favours a move away from a tax on labour to taxing activities that lead to climate change and inequality.
Solidarity-People Before Profit in favour of a wealth tax
Instead of dividing up the “miserable crumbs” of the fiscal space Solidarity-People Before Profit believe more revenue should be raised through taxes as part of Budget 2018.
The group would scrap the current property tax and replace it with a landlord tax.
This would be in the form of a €600 levy on a person’s second property and a tax of €1,000 on third and subsequent properties.
Launching its pre-budget statement Paul Murphy said: “We are in favour of a real property tax which would be a wealth tax which would be a tax on people’s assets, which are primarily assets which would include second and third homes in some cases, which would include private airplanes, yachts, etc. We are in favour of taxing those assets.”
On top of a millionaires’ tax on the richest 5%, the group would also bring in a new range of income tax bands for the wealthy.
Those earning between €100,000 and €140,000 would be charged a 50% tax rate. This would increase to 55% for those on salaries between €140,000 and €180,000, while those earning €180,000 to €250,000 would be charged 60%. All those on earnings above €250,000 would come under the 65% tax band.
Richard Boyd Barrett said: “The hidden secret of this economic story is that while housing, health and public service have been starved of resources and the real value of workers incomes have been slashed, there has been a spectacular increase in corporate profits and the wealth of the very richest in Irish society.”
The group would close tax loopholes and would double corporation tax.
Mr Murphy sad: “The Apple tax scandal exposes the strategic choice at the centre of the political establishment’s approach — for Ireland to operate as an Atlantic tax haven.
“The tax proposals we make are designed to demonstrate how the wealth currently exists in our society to transform people’s lives.”
By raising €16bn through new measures, including taxes, the group would deliver free GP care to everyone and would remove all inpatient charges and all prescription charges.
“This would bring us on the way to having the sort of single-tier national health service that people are crying out for the replace the dysfunctional two-tier health service that we currently have,” said Mr Boyd-Barret.
The group would also aim to tackle the housing and homeless crisis through the provision of 40,000 social and affordable homes, through the direct construction of 20,000 houses and compulsory acquisition of another 20,000 vacant units next year. This would be part of a programme of delivering 100,000 homes over the next five years.
Similar to the Social Democrats, Solidarity-PBP also believes the reduced Vat rate for the hospitality sector has served its purpose and should be axed, with the savings pumped into public services and public investment.
Pupil teacher ratios would be dramatically cut from the current 1:27 to 1:18 and all third-level education fees would be abolished.
Social Democrats maintain EU fiscal rules ‘do not make sense’
The Social Democrats want the Government to “challenge” what they described as ludicrous EU fiscal rules which dictate the amount that can be spent in the budget.
Róisín Shortall said more investment is needed in housing, electricity, broadband, transport and third-level education.
“The fiscal rules do not make sense in this country at the moment, given the huge under-spend in infrastructure and we are saying that those rules should be challenged at European level,” she said.
Launching their alternative budget, the Social Democrats said they would introduce a land hoarding tax as well as a new affordable housing scheme for first-time buyers and would place a cap on rents nationwide. However, they would abolish the help-to-buy scheme, which the party says has added to price inflation and worked against the interests of first-time buyers.
The party would use public land-banks to deliver both social housing, affordable rental and affordable purchase housing. In addition, they would ensure a percentage for affordable housing so that new developments would be a mixture of 70% for purchase, 20% affordable and 10% social.
One of the central proposals put forward by the party is the retention of tax rates in favour of investment in our services such as health.
Ms Shortall said: “We need to maintain our tax base at the moment, we don’t pay particularly high rates of tax in this country so it’s important to look at that. The Government is talking about introducing some minor cuts. What is the point of some people having an extra fiver in their pockets each week when they have to pay through the nose for health services, for childcare for housing — that just doesn’t make sense and it doesn’t make for a fair and cohesive society either.
“The biggest beef most people have is not over income tax, but the fact that they have to fork out for everyday public services that people in other countries take for granted.”
The Social Democrats described the special 9% Vat rate for the hospitality sector as a “very blunt instrument” and want to scale it down over a three-year period and use the saving to support small businesses in rural towns.
Families would also benefit from paid parental leave and a €25 increase in the back to school clothing and footwear allowance.
They would also commit to implementing the Sláintecare 10-year plan to build a modern and efficient public health service based on medical need rather than the ability to pay.
Catherine Murphy said: “Our budget proposals are fundamentally about fairness and long-term planning — spending wisely now in order to save later. If we don’t pull out all the stops to tackle the homelessness emergency, the house rental crisis, and the serious infrastructure shortcomings facing the country, we are just shoring up problems for the future.”
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