Former Labour minister Roisín Shortall has warned that high earners should not be “the untouchables” in the budget.
Her comments are primarily aimed at Fine Gael, which opposed a Labour demand for a 3% increase in the universal social charge for those earning over €100,000.
However, Ms Shortall’s remarks may also serve to further expose Labour’s weaknesses in the Coalition and its perceived inability to get key policy proposals implemented.
“If reports are true that Fine Gael ministers are only prepared to allow for extra tax on higher earners if cuts are also applied to social welfare recipients, then this represents a new low in Irish politics. So much for fairness and social solidarity.”
Citing figures from the Department of Finance, she said a 3% levy or social charge increase on six-figure salaries would bring in almost €200m.
Ms Shortall said about 100,000 people earned in excess of €100,000.
“Does anyone seriously think that our country can ever make ends meet again if we continue to treat the income of higher-earners as untouchable?”
Although focusing her ire on Fine Gael, she pointedly said it was time for the cabinet as a whole “to show some real leadership”.
Labour pushed for the 3% surcharge to be included in tomorrow’s budget as a demonstration of fairness to ensure the highest earners contribute the most.
Fine Gael stoutly resisted it by calling for cuts to social welfare rates instead — which would be anathema to Labour. The parties are understood to have settled on a so-called mansion tax, whereby owners of homes worth in excess of €1m will pay a substantially higher property tax.
However, Ms Shortall said it was her belief that a majority of the Dáil, including some Fine Gael backbenchers, supported a levy on higher incomes.
“A temporary solidarity levy would achieve significant savings, would have widespread support, and would go a long way to improving social cohesion where it is under threat in these difficult times. It is time for the cabinet to show some real leadership.”
Ms Shortall resigned as junior health minister after the row over primary care centre locations.
She subsequently accused Fine Gael Health Minister James Reilly of “stroke politics” after he added two locations in his own constituency to the list.
Her resignation caused a headache for Labour leader Eamon Gilmore, who was accused of propping up Mr Reilly at the cost of one of his own ministers.
Ms Shortall said to date, budget cuts “disproportionately affected” people on low and middle incomes.
“This, in turn, has had a very negative impact on the domestic economy as a result of reduced disposable income. Focusing cuts and tax increases on the poor automatically impacts on domestic demand; focussing cuts and tax increases on the better-off does far less damage. It would also go some way to allaying the deep sense of unfairness felt by many people.”
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