Better by far to build a fairer Ireland - Budget tax promises

FINANCE MINISTER Michael Noonan’s steady-as-she-goes warning that next month’s budget will not be the first cousin of a pre-election giveaway is reassuring and entirely appropriate. 

Things may be, once again, getting “boomier” but far too many of our public services are struggling to meet the needs and expectations of contemporary Ireland and it seems likely those expectations and demands will grow and grow. Considerable, extra investment is — and will be — needed.

It is time to rebuild rather than repeat the unsustainable excesses of a decade ago. Those hard and costly lessons suggest it is time to have real ambition around what can be achieved in education, health provision, and social protection rather than fuel another bonfire of the vanities — though that scorching indicator is blazing away. New car sales are at record levels and Spanish tourism authorities expect that as many as 1.5m Irish people will take a holiday in their country next year. It is not being overly Calvinist or dour to suggest that our over-stretched public services and that energetic, expanding consumerism seem incongruous.

Those society-strengthening ambitions must carry a caveat. Any increase, no matter how modest, in investment in public services must run parallel to reform where it is needed and evolution where it is desirable. Any available resources must be used to enhance services, not pay or conditions except where new entrants to teaching, nursing or the gardaí are paid less than their predecessors but expected to do the same work.

There is too the looming crisis that no one seems willing to recognise or confront in any meaningful way, although Siptu president Jack O’Connor addressed it recently when he suggested that the USC should not be cut at all but rather diverted to try to fund the gargantuan pension obligations facing the State. This seems a sensible, realistic proposal and an acknowledgement of the urgency surrounding this unavoidable issue. It would certainly build confidence if Mr O’Connor’s suggestion, or a version of it, was implemented; even more so if it was supported by the long overdue appointment of a pensions’ minister.

Mr O’Connor is not the only one offering what seems sensible advice to the Government. Central Bank governor Philip Lane has also stressed the need for prudence, warning that spending plans should not be shaped by transitory peaks in tax revenue. Prof Lane said the Government would be wise to assume that a significant portion of the current surge in corporation tax revenue may be a temporary boon. Recent exchequer returns showed corporation tax receipts were €500m ahead of target last month, following a record year in 2015.

A mention of corporation tax brings the Apple ruling into this conversation. National governments must be able to impose fair, proportionate taxes on multinational companies earning profits in their jurisdiction — and it even more important they find the confidence and determination to do so. We have tried the if-I-have-it-I’ll-spend-it model and paid for that silliness. It’s time to see the bigger picture and invest in making Ireland a better and more equitable society.

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