800,000 Irish people are poor. The budget can change that

Addressing Ireland’s economic and social infrastructure deficits should be the priority in Budget 2019 says Dr Seán Healy, Director of Social Justice Ireland.

IRELAND now has the resources to ensure that Budget 2019 addresses social injustice for our people. Priority should be given to tackling the social housing crisis, reforming the healthcare system, and addressing rural and regional challenges, with a focus on resourcing communities. For the first time in years, the Government has the resources to reduce Ireland’s social and economic infrastructure deficits.

In its latest policy briefing, entitled ‘Budget Choices’, Social Justice Ireland says the choices made by governments in their annual budgets have dramatically different outcomes for different groups in society. Despite many welcome developments in the growing economy, the damage done through the economic and budgetary crises of the last decade is still being felt by Ireland’s most vulnerable.

There are two sides to this story. On one hand, Ireland has recovered and many of the economic fundamentals are positive. On the other, despite this recovery in the economy — now growing at least twice as fast as our European counterparts — 800,000 people are living in poverty, the largest proportion of which are children; the housing crisis has removed the most basic of safety nets from those living on the edge; and we still haven’t found the political courage to say Ireland is a low-tax economy that needs to raise new revenue to fund vital social infrastructure.

Most people want an end to homelessness, social housing shortages, hospital waiting lists, and child poverty. They want the lack of affordable childcare to be addressed, and they want investment in rural broadband. These should be the priority targets of Budget 2019. Social Justice Ireland’s budget choices for 2019 are based on the values that have delivered for the most progressive societies around the world. Ireland needs to raise its total tax-take to fund a fairer society. That’s a difficult issue.

However, it is not necessary to become a high-tax economy. Budget 2019 has the potential to lift people out of poverty, to deliver a major breakthrough in the supply of social housing, to improve healthcare provision, and to resource communities.

If the Government wishes to address infrastructure gaps, these are some of the proposals for Budget 2019 set out by Social Justice Ireland; they have been costed independently and full details of how they can be paid for are set out in the think tank’s Briefing on Budget Choices 2019 (see socialjustice.ie).

Social Housing: €1,250m, in addition to what’s already committed in government plans, towards providing an additional 90,000 social housing units.

Healthcare and disability: €1,112m investment, prioritising social and community care, disability, mental health, and Slaintecare.

Rural/Regional Development: €505m to help complete the rollout of high-quality rural broadband, as well as additional investment in rural transport, rural enterprise, retrofitting of houses, and community supports.

Education: €448m investment in areas such as adult literacy, DEIS, skills development, and digital education.

Pensions: A universal pension, financed mostly by reducing tax-breaks that currently favour the better-off.

Social Welfare: €331m, which includes an increase of €6.50 a week on social welfare payments and an increase in direct provision payments.

Children: €180m focused on Early Childhood Care and Education, paternity leave, and affordable childcare.

Official Development Assistance (ODA): An additional €136m, as a contribution towards increasing the aid budget over the next seven years to the UN target of 0.7% of GNI*.

Tax Reform: Budget 2019 should be designed so that it is both economically sound and socially fair. These twin objectives are both realistic and achievable. However, they need to be underpinned by a clear policy commitment and by budget decisions aimed at achieving both.

To this end, Social Justice Ireland proposes a series of tax reforms, including the following:

  • Standard rate, all-discretionary tax expenditures: €480m;
  • Standard rate tax break on all pension contributions: €483m;
  • Remove tax-refund element for R&D tax credits: €168m;
  • Introduce a minimum effective corporate tax rate: €1,000m;
  • Equalise excise duty on diesel and petrol: €68m;
  • Increase accommodation sector VAT rate to 13.5%: €220m;
  • Increase tax on in-shop and online betting by 3%: €150m.
  • While the economy is doing well and the wider world marvels at our recovery, a series of crises in this country must be addressed: crises of healthcare provision, social housing, poverty. We need to measure ourselves by how we treat the weakest in our society. By that measure, we are failing.

    Budgets can change people’s lives, for better and for worse. Adopting the measures set out above would move this country towards addressing the infrastructure gaps — economic and social — that are becoming more obvious every day.

    They would also move Ireland in the direction of becoming a fairer, more equal society.

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