Budget deeply regressive, says Social Justice Ireland

The Government has introduced a “deeply regressive” budget for the second year in a row, Social Justice Ireland has said.

“It does nothing to foster economic recovery or to provide a vision and direction for the country,” said the organisation’s director, Fr Seán Healy.

He claimed it was both socially and economically regressive. On the social side, he said it hit people on low incomes, including the working poor, more than it hit the better-off.

He pointed to the change in PRSI, which will see those with incomes as low as €18,300 hit for the same amount as those on €100,000 and more.

He said the carbon tax was increased without any “compensating mechanism” for poor or rural households who were affected disproportionately by the levy.

“A family could, as a result of this budget, be hit by all of the following: Reductions in child benefit, the abolition of the PRSI allowance, the introduction of a property tax, the trebling of the prescription charge for medical cardholders, the increase in the drug payment scheme threshold and the abolition of the cost of education allowance.

“If the family was already vulnerable or in poverty, the cumulative effects of these initiatives will have a devastating effect on their already precarious situation.”

On the economic side, the organisation said the budget failed “totally” to address unemployment.

“Without a substantial increase in investment there will be no increase in jobs on the scale required. Without jobs there will be no recovery. Without recovery, Ireland will remain mired in austerity for the foreseeable future.”

He said the Government’s approach, following on that of its predecessor, was not working.

“Despite taking almost €28bn out of the economy in tax increases and expenditure cuts since Jul 2008 we are still left with 700,000 people at risk of poverty, falling domestic demand, record levels of long-term unemployment, rising emigration, and 100,000 households on waiting lists for accommodation.”

Social Justice wants to see a stimulus package of €7bn over three years. It said this could be funded from the National Pension Reserve Fund, the European Investment Bank, and other sources.

It said companies should have been asked to contribute more, and it was particularly critical of politicians for not leading by example. While the Government announced it would reduce political expenses, it is leaving politicians’ pay intact.

“There is marked contrast between how children were treated in Budget 2013 and how corporations were treated.

“While households with children saw their incomes reduced, the corporate sector was not asked to make any contribution towards financing Ireland’s recovery. Not alone that — they were given further tax reliefs.

“Similarly, the contribution sought from some politicians, public servants, bankers, and well-off civil servants was minimal.”

Social Justice said the budget would provide a “harsher” society.

“There is a profound lack of any guiding vision that would suggest Budget 2013 was moving Ireland towards a future where everyone had access to the basics required to live life with dignity.

“The choices Government is making are undermining Irish society and dismantling the social model that has underpinned Ireland’s development for more than half a century. Fair and balanced development is being replaced by choices that are producing a deeply divided two-tier society.”

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