You can’t build a society of fairness and sustainability based on tax cuts and hand-outs. You do it with massive public investment. If there really was a case for failing to heed the advice of the Fiscal Advisory Council, and for borrowing an extra half-billion to stimulate the economy, then every penny should have been invested in our future through education, public transport, housing, energy and communications.
Instead, this Budget has allowed for a 29% reduction in spending on broadband, a 12% reduction in spending on energy, a 2.9% reduction in spending on transport, and a 4% reduction in spending in our struggling higher-education sector.
I welcome a €2.2bn spend on public housing and, thanks to new building regulations, the houses should hardly have to be heated.
I urge the Government to add rainwater-harvesting to the regulations next year and turn the new public housing into machines for living that run for half-nothing.
But the investment is too small. As the housing charity, Threshold, said yesterday, spending on public housing has collapsed by 80% in recent years, and while there are 90,000 families on the housing lists, this new investment will deliver 10,000 homes.
VISIT OUR DEDICATED BUDGET 2015 SECTION section.
I realise that Minister for Public Expenditure and Reform, Brendan Howlin, and Minister For Finance, Michael Noonan — hard-working, intelligent men — have had a tough time designing this Budget, as our infantile media encourages the public to shout, ‘Me, me, me!’ It was probably not realistic to expect them to take the road less travelled; but did they have to take the super-highway to the next election?
It has cost us so much to get to where we are.
We spent the years after the crash painfully widening the tax-base and making our tax system the most progressive in the OECD. These adjustments should have been made when the money was flowing.
They weren’t, and we ended up having to cut ourselves out of briars of debt.
But I was proud that, while we cut, we also hugely increased the progressivity of our tax system. Having a progressive tax system is not about taking money off well-off people because we want revenge. It is not just about having more money to spend on services. It is important because equal societies work better.
Equalising tax regimes, in times of emergency, have included Roosevelt’s New Deal, which took the US out of the Great Depression, continuing to a top tax rate of 94% in 1944, and a tax rate of 80% on £2m in the UK in the 1960s.
Writers like Thomas Piketty are arguing that today’s global capitalist model is capable of widening the gap between the rich and poor at a staggering speed.
Writers like Naomi Klein are arguing that the key to lowering our carbon emissions, and securing the future of the human race on this planet, is in creating socially cohesive societies that invest in renewable energy, public transport, public housing and education.
That is where the progressive Left is now. But where is our Left, with Labour in government? It’s lowering the 41% tax rate to 40% and planning to lower it to 39% next year. As Sinn Fein TD, Mary Lou McDonald, said yesterday, this will only affect 17% of workers and the highest earners will gain most, with the 11% USC charge on the self-employed who earn over €100,000 only clawing back some of the gain.
The Government says it is focussing its efforts on the plight of the ‘squeezed middle’, who earn between €30,000 and €70,000 a year. These are the people who have lost least through the period of ‘austerity’, but they are the people who vote for Fine Gael and Labour.
I find the cut to the top tax rate stomach-turning. I understand the arguments about making work attractive for job-creators, but I do not believe our upper rate had passed that tipping-point.
I grew up the daughter of a highly-paid public servant, who was paying 60% income tax, but I do not accept the orthodoxy that high tax rates were the main factor behind the 1980s recession. There was widespread tax avoidance and widespread corruption. More to the point, the modern Irish economy had not been built.
Now it has been built, it needs to be complemented by a highly progressive tax system, if we are not to return to Celtic Tiger values.
A tax system is also about creating a value system.
We said, on Tuesday, that the only benefit of a good income is having more money in your pocket, but I want to live in a society where the benefit of a good income includes the chance to contribute to a community of which we are all proud.
I realise that, as things stand, this makes me an outcast. There is no-one in the Dail consistently advocating for a sustainable, progressive society. In recent times, the Left wing has only been able to organise people effectively around the water charge — a charge that is necessary for our future sustainabilty.
We will not conserve water if we don’t pay as we use, so the charge will actually change our value system. Charging for water in a group scheme in Co. Cavan recently led to a 50% reduction in usage.
I accept that the charges should also reflect ability to pay and such a regime of water credits has been devised by the think-tank, TASC. But the basic principle of paying for water must be advocated.
Instead, the Government blamed the charge on the Troika and, in the face of mass protests, cobbled together a €100 reduction for some groups of welfare recipients, including the well-off over-70s who vote for them, and excluding the vulnerable, short-term unemployed.
But Sinn Fein and the so-called Left-wing Independents aren’t shouting for the tax to be made fairer, they’re shouting for it to be scrapped, and with this call they have mobilised the masses.
I don’t remember tens of thousands of people on the streets when the respite grant for the disabled was cut by 25% in 2012, and I don’t see them now, though it is not true, as Tanaiste and Minister for Social Protection Joan Burton suggested on RTÈ yesterday, that this cut will be partially off-set by gains for carers, because many disabled people who receive the grant have no carer.
Nor will of thousands of people protest because the first Budget of the recovery cut the top rate of income tax.
What can you expect of the Right, when the so-called Left only cares about one thing: how many sweets and for which babbies?
VISIT OUR DEDICATED BUDGET 2015 SECTION section.