Plea for fairer tax system

A fairer tax system would give the Government the cash needed to tackle child poverty and meet the cost of childcare, it was claimed today.

The Cori Justice Commission said tax reliefs cost the Government around €8.4bn a year, but were skewed to benefit the better off.

Fr Sean Healy SMA, director of the commission, said standardising tax reliefs so they were available at 20% and not at 42%, as many are at present, would provide the Exchequer with at least €2bn.

“The income to the Exchequer produced by making the tax system fairer would then be sufficient to tackle the child poverty, child care and ‘working poor’ issues that need to be addressed,” he said.

Fr Healy said putting in a system which made tax credits refundable to those on the lowest incomes, and introducing a children’s credit which was also available to the unemployed, would address child poverty and child care issues without increasing income tax or corporation tax.

“We need an integrated approach to addressing child poverty and child care, which puts the child at the centre of the policy-making process.

“Discussion is often focused on how to benefit the economy, but there’s a child poverty issue as well and both issues need to be addressed,” he said.

“One in four people at risk of poverty in this country live in households headed by somebody with a job,” he said.

“This is a good system for tackling the issue of the working poor and keeping up the incentive to work.”

Cori Justice Commission said other policies such as moving towards a carbon tax and avoiding a ‘race to the bottom’ on corporation tax in the face of competition from other EU countries would also make the tax system fairer.

The commission said the standardising of tax relief would enable the Government to make tax credits refundable and to meet the National Anti Poverty Strategy commitment to raise the lowest social welfare rate to 30% of gross average industrial earnings.

Fr Healy said the cash was also needed to make substantially more progress towards increasing the number of social housing units by 73,000.

Some of the the money saved by the Exchequer could go towards funding the development of primary care in the health system, which would improve health and tackle the A&E crisis faced by the country’s hospitals, he added.

The plan was laid out in Cori Justice Commission’s policy briefing published in advance of the budget next month.

“They’re reasonable proposals that can be implemented within solid fiscal parameters, without damaging the economy, having negative impacts on inflation or the budget expenditure.

“If they were implemented they would have a substantial impact on child poverty and childcare,” Fr Healy said.