Religious propose tax increases
In a position paper prepared for the start of talks on a successor to the Programme for Prosperity and Fairness (PPF), the Conference of Religious of Ireland (CORI) said there was a disparity between what society at large wanted and what it was willing to pay for.
CORI Justice Commission spokesman Fr Sean Healy said the average revenue from tax and social insurance contributions across EU member States amounted to 42% of Gross Domestic Product, the measure of goods and services produced, compared with just 34% in Ireland. He said the gap could be partially met by introducing new taxes such as an eco-tax on water, fuel and fertiliser consumption as well as waste production and other environmentally unfriendly practices.
The commission has also called for a land rent tax and taxes on currency transfers made by financial speculators. It also says Corporation Tax should be maintained at its current rate of 16% and plans to drop it to 12% scrapped.
“If Ireland is ever to have EU levels of infrastructure and social provision it must move towards a tax-take level closer to the EU average,” said Fr Healy. “I’m not saying we go all the way to match the EU average but, even if you moved it a couple of percentage points, it would give off the resources to make available the level of housing, public transport, welfare and other services we would argue Irish people want.”
The social partners are due to meet on Thursday to begin talks on a new national agreement to follow the PPF which comes to an end within the next year.
Negotiations are expected to be difficult given the problems the PPF, agreed in early 2000, ran into trying to make wage agreements stick in the face of resistance from workers citing fast rising prices and employers complaining of straightened circumstances.
Devising a successor will not be made any easier after this month’s exchequer returns forecast a budget deficit at the end of December for the first time since 1997.
The Government has hinted tax rises may be on the cards with cutbacks being the only real alternative given the widespread opposition to large-scale borrowing.
Fr Healy said, whatever approach was taken, care had to be taken that low-income households did not suffer. He called on the Government to commit itself to raising the lowest social welfare payment to 30% of average industrial wage by 2007. In 2002 terms that would mean an increase from 118.80 to 150. Not all income issues could be addressed through work-related taxes, he said, because 60% of those in poverty were in households headed by a person who, for reasons of illness, age or caring duties, could not be in the labour force.
