FERGUS FINLAY: Our values are upside down if our priority is to reduce top rate of tax

YOU contacted me in your droves last week and expressed yourselves in words of one syllable — all because I queried the significance of the John McNulty debacle.

Over the years, we’ve had beef scandals, planning scandals, banking scandals, political scandals and no end of financial scandals.

We’ve had political strokes of all sorts, to do with everything from passports to primary-care centres. I just couldn’t elevate the cock-up over a Senate candidacy to the same league. Stupid, I know, but there you are.

I’m in the same position this week, because there’s something else — something entirely different — that I’m having real difficulty understanding. Given the battering I got last week, I’m accepting up front that I must be wide of the mark. I’m just not getting it.

Here’s my dilemma. Because of the prevalence of other stories, there hasn’t been nearly as much coverage, as there usually would be, of next week’s Budget. But, so far, only one hint has emerged about what will be in it. The Taoiseach has set out a goal, and neither the Minister for Finance nor the Tánaiste have demurred, and every political commentator and economist I’ve read has agreed that it is likely to be the top priority.

Yes, folks, apparently this is the Budget that will start the process of reducing the top tax rate in Ireland. Whatever else happens or doesn’t happen, whatever else we can or can’t afford, we are all so concerned about people who qualify for the top tax rate that, come hell or high water, we’re going to do something about it this time.

We’ve even invented a new label to describe the unfortunate people in this category. We’re calling them the ‘squeezed middle’.

I’ll come back to them in a minute.

Let me tell you a little story, first. This is a true story, told to a project worker in Barnardos by an eight-year-old boy. He lives in a town in rural Ireland, with his parents and his three siblings.

“My mam was in a bad car accident a few years ago and had to close the shop she had, and that made her really sad. Dad is sick and gets really annoyed that he can’t get a job and get some money. Mam and dad worry about money all the time and how much everything costs. They try and pretend to us everything’s okay, but I know it’s not.

“My big brother is 14. He is sick, too, and needs the same special food as dad. Mam used to be able to get it free, but now we have to pay for it and it costs a lot. We can’t get the nits shampoo, either, and the school keep saying we need to use it. I know mum is worried about this, as well, and, sometimes at night, the itching gets really bad when I am trying to go to sleep.

“My big sister has just started college and finds it really hard to make new friends, because she has no money to go out and doesn’t want to ask mam or dad for money.

“Once, the car ran out of petrol on the way to school and mam and dad didn’t have any money for more, so me and my brother didn’t go to school for a week. I missed seeing my friends and didn’t know what to say when they kept asking why I wasn’t in school, so I told them we went on holiday. They also finished off the book we were reading and moved onto a new one, which was annoying, as I was really enjoying it and now I feel a bit lost.

“Sometimes, I don’t tell my parents if I have been invited to a birthday party, as I know they’ll be worrying about getting the birthday present. I wish we didn’t have to buy presents and we could just meet up to play football.”


That little boy’s story is told in our pre-Budget submission, which we’re publishing today. And the thing about him — and his family – is that they long to be considered part of the ‘squeezed middle’. But they’re an awful long way from it.

Yes, there is a ‘squeezed middle’ in Ireland. Thousands of families are finding it really hard to make ends meet, and worry every month about how to pay basic household bills. There are many, many more who live in even deeper poverty.

The solution has nothing to do with lowering the top tax rate — although I accept we need to increase the income levels at which the top tax rate is paid.

If a lower top tax rate is the only significant achievement of this Budget, it will go down in history as having increased inequality in Ireland.

And that’s precisely the last thing we should be doing. It’s also the opposite of what the Government has promised to do. In its recently published statement of priorities, they have pledged to tackle inequality and to ensure that any economic recovery benefits every citizen.

Now, at last, we’re seeing economic growth. All the experts tell us it’s fragile and that we have to be careful. I buy that. The worst thing we could do is go back to the days when finance ministers saw it as their job to fund a national party. We all know how they blew it the last time. Money is cheap again, it seems. Now is not the time to start blowing it again.

But there are people who never benefited from economic growth in the past, people who were by-passed by prosperity. They are the children who live in disadvantaged communities, the mothers who have to choose between food and electricity bills, the parents who struggle to raise families on incomes little more than the minimum wage.

The word I want to see most in Michael Noonan’s Budget speech next week is ‘equality’. I want him to acknowledge that in the years of austerity, poorer families suffered most.

I want him — and Brendan Howlin — to put any spare cash they have into measures that would help to reduce inequalities and ease the burden on those who are struggling most.

That means child benefit, investment in housing, easing the transition from welfare to work, ensuring that children are enabled to start education, and stay in education, on the best possible basis.

I’ve written before, here, about the priority that needs to given to child protection in this Budget. There is the scope, even in these straitened times, to prevent future scandals in this area, and there must be a realistic investment in the new structures that have been put in place.

Now is the time to start the process of building a recovery that’s truly equal.

There is only one way to do that — start at the bottom, not at the top. Reduce the top tax rate by all means —but only when the real issues of inequality have been dealt with first.

There’s only one way to build a recovery that’s truly equal ... start at the bottom, not at the top.

Barnardo's Children's Budget 2015: http://www.barnardos.ie/budget2015]


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