Think-tank calls for tax increases in budget

The Government has been urged to increase taxes in the next budget instead of pressing on with much vaunted cuts.

The Social Justice Ireland think-tank called on Finance Minister Michael Noonan to plough money from taxpayers into reversing cuts to caring, housing, and anti-poverty services that have been implemented over the last six years of austerity.

In two of the more controversial proposals, the group said businesses should pay a minimum effective corporate tax rate of 6% to generate at least €1bn for the state.

The better-off in society — those earning salaries of in excess of €100,000 a year — should be hit with a 3% income levy through the Universal Social Charge, which, the group said, would raise €210m.

Fr Sean Healy, director of the organisation, said the next budget would be about recovery and determining what kind of a country our children will inherit.

“This is not the time for tax cuts,” he said.

“All available resources should be used to invest in addressing Ireland’s major deficits — in areas such as caring, housing, and poverty that affect the young, the old and most in between.”

The think-tank, which each year costs its own version of the budget, said spending should increase by €1.5bn as set out in Government plans.

Some of the main spending ideas include an additional €680m to support the social housing strategy, with new options on low-cost finance; €350m spent on health to support primary care teams; and new measures to support older people and those with disability, and to tackle obesity.

Social Justice Ireland said a new universal pension should be introduced and welfare payments be increased by €6.50 a week.

It also called for a €350m investment in education to help adult literacy, afterschool care, and early childhood education; and €710m to be spent on broadband, rural transport, and a rural enterprise scheme.

Social Justice Ireland said the country should have EU average levels of tax in order to pay for an EU average level of services and infrastructure, but it does not.

Michelle Murphy, research and policy analyst, said: “After many years of coping with the financial downturn, we, as a nation, now need to consider what sort of a future we want for our children and our grandchildren.

“Some of the decisions we take now, on issues like social housing, childcare, and broadband, may not bear fruit for some years — yet it is vital that these good decisions are taken now, because these decisions will shape the way Ireland looks and functions in the future.”

Fr Healy added: “Whilst Minister Noonan is required to frame Budget 2016 within the parameters of the EU Stability and Growth Pact, this should not stop him from framing worthwhile, and overdue, investments in society, as well as the economy.”