The Government should use the super-healthy Exchequer funds to splash out €1.5bn extra a year on social spending, it was claimed today.
The Conference of Religious in Ireland (CORI) said Finance Minister Brian Cowen had taken steps in the right direction but more could be done to create a fairer tax system and social housing.
Father Sean Healy, CORI justice commission spokesman, said it was more than feasible for the budget debutant to earmark millions more in spending.
“The point basically is that one swallow doesn’t make a summer in the sense that you have to put the whole thing in context,” he said.
“There is targets that the Government has set itself to raise social welfare rates.”
He acknowledged however that this was step one, and not everything could be done at the beginning.
Projections from the Department of Finance revealed overall budget deficits averaging €3bn per year from 2005-2007.
CORI’s budget report said Ireland had an “optimal” exchequer position in the eyes of other European states.
Fr Healy said based on the figures it was clear there was significant potential for this Government to deliver on promises of social welfare, overseas development aid, social housing, medical cards, local services and education.
The report, however, welcomed a number of steps taken by Finance Minister Brian Cowen including increases on tax credits, lowest social welfare rates and the special disability multi-annual funding package.
Fr Healy also welcomed the minister’s changes on the tax system.
“We are very happy with the focus of the tax cuts process, and that was what we focused very clearly on targeting tax cuts on people on the lowest incomes,” he said.
“What was required there was to raise the tax credit and what he did in effect by taking the minimum wage out of the tax net was in fact the way to go.”
If the positive steps taken in Budget 2005 are to be continued, the report said, Budgets 2006 and 2007 need to give priority to some key issues.
CORI called for an increase in the lowest social welfare rates to 30% of average industrial earnings by 2007.
The report also suggested boosting social housing provision, tackling the two-tier healthcare system, ensuring a fairer tax system, tackling child poverty, addressing rural and regional deficits, raising ODA to 0.7%. of GNP.