The Irish Congress of Trade Unions created a detailed pre-budget statement in which it laid out a number of costed measures it believes would begin to make tangible differences in the lives of people who were yet to benefit from the recovering economy.
“The value of the credit would be set at a level consistent with a full year cost to the exchequer of €300m,” it says. “This means the value of the credit would be worth close to €200 for an individual.” It said the gain as a percentage of gross income would be largest for those on lower incomes and it proposed that individuals earning €70,044 or more should not benefit from the introduction of the USC credit.”
“Tax breaks and favourable tax treatment for non-productive assets such as houses and hotels distort investment away from more productive use and are therefore damaging to long-run growth,” it says. “The distortion erodes allocative efficiency in the economy, is damaging to growth, and provides mechanisms for tax avoidance.”
Siptu says its proposal is based on four key principles: Retaining the progressive elements of the existing USC; dedicating the yield for social investment purposes; ensuring transparency as to the use of the contributions; reducing the charge on low- to middle-income earners
“The revenue generated from this social solidarity contribution, which should at least equal the approximately current €4bn USC yield, would no longer go into central exchequer funds,” it says. “Instead, it would be dedicated exclusively to social investment purposes, such as improving healthcare, education and training, childcare and elder care as well as providing for the housing needs of all the population.”
For its part, Unite trade union has published budgetary package amounting to €4.8bn.
On the expenditure side, Unite has proposed increasing public expenditure on investment, public services and social protection of €1.925bn together with €700m on the initiation of new public service programmes — affordable childcare, a cap on prescription medicine costs, and pay- related sickness and unemployment benefit.
The union is also proposing tax reforms, including elimination of the PRSI step effect and the introduction of refundable tax credits at a cost of €220m.
Unite is also proposing a special temporary housing investment programme to tackle homelessness and provide housing for those with priority needs. The cost of this programme would be €2bn, and would be funded by “the repayment of bank bailout funds”.
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