Alternative budget cuts €3.8bn without touching welfare or child benefit

THE Government can still make €3.8 billion in cuts without slashing social welfare rates or child benefit, by introducing measures such as a text message tax and “bad nutrition” tax, according to Social Justice Ireland’s alternative budget plan to be delivered today.

The fully costed budget by the charity organisation will be laid before the Oireachtas Committee on Jobs, Social Protection and Education today and social Justice Ireland director Dr Sean Healy, said it meant the Government could help the less well-off by increasing the total tax take, led by a levy of 2.5% on corporate profits and a tax on the sending of phone text messages.

He will tell the committee that the proposal to increase the total tax-take by €2 for every €1 cut from public services in Budget 2012 would not need to include income tax.

The 28-page document, entitled Adjustment Choices, instead proposes a range of measures that would, Dr Healy argues, help create 100,000 jobs, boost primary level education and adult literacy programmes and develop a new €1bn capital investment programme to benefit the vulnerable and the economy.

Dr Healy said the present approach being taken in advance of the budget next week was “not working” and that the Government did have choices to make, even allowing for the requirement to cut borrowing.

The Social Justice Ireland proposals include:

* The borrowing reduction target is achieved by tax increases and expenditure reductions on a ratio of 2:1.

* Social welfare rates and child benefit remain untouched.

* A 2% bad nutrition tax on products containing unhealthy levels of salt, alcohol, sugar and trans fats to yield an estimated €15m.

* A nominal text tax of one third of one cent (€0.0033) should be levied on each SMS, bringing in an estimated €40m in the course of a year.

* Tax credits be made refundable for the working poor.

* A levy of 2.5% should be introduced on corporate profits in Budget 2012, claiming this would provide

* An additional €892m in taxation revenue in 2012.

* The USC levy of 3% be extended to all income in excess of €100,000 irrespective of its source, with claims that it would bring in an additional €50m in taxation revenue next year.