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Budget 2020 must be Economically Sound and Socially Fair

Most Irish people want to see an end to homelessness, social housing shortages, hospital waiting lists and child poverty. They want to see the lack of affordable childcare addressed, investment in rural broadband, progress on our climate commitments and much more. These should be the priority targets of Budget 2020.

In our latest Policy Briefing, entitled Budget Choices, Social Justice Ireland points to the need for increased investment in the necessary services and infrastructure that a vibrant economy requires.  To deliver increased levels of investment a modest increase in the overall tax take is required.  Good governance and sustainable choices on the economy, the environment and society are essential to delivering a Budget that is economically sound and socially fair. 

The Briefing goes on to argue that we need the political courage to say that Ireland is a low tax economy that needs to raise new revenue to fund vital social infrastructure.  This is essential to meet the challenges we currently face in housing and healthcare for example, but also to ensure we are ready to face the potentially damaging fallout from Brexit, and changes to the international corporate taxation system. 

Social Justice Ireland’s Budget Choices for 2020 are based on the values that have delivered for the most progressive and equal societies around the world.  Our choices promote the common good and a fair, vibrant and sustainable Ireland.  Social Justice Ireland is proposing a modest increase in the overall tax take, to fund the infrastructure and services we so badly need, and to move away for our over-reliance on volatile corporate tax receipts.  This change would not mean Ireland becoming a high-tax economy.

The key question that should underpin Government decisions on Budget 2020 is what approach would be economically sound and socially fair?  These twin objectives are both realistic and achievable. However, they need to be underpinned by a clear policy commitment and by Budget decisions aimed at achieving both.

Main proposals on investment:

Housing: €1,077m in addition to what’s already committed in Government plans towards increasing the resources to provide an additional 120,000 sustainable homes. (p. 8 of Budget Choices)

Rural/Regional Development: €496m to help complete the rollout of high quality rural broadband, as well as additional investment in rural transport, and the development of rural enterprise and tourism, as well as increased funding for the community and voluntary sector. (p. 10 of Budget Choices)

Healthcare and disability: €1,130m investment prioritising social and community care, disability, mental health and Sláintecare.  (p. 11 of Budget Choices)

Education: €429m investment in areas such as adult literacy, DEIS, skills development, community education, digital education and higher education. (p. 12 of Budget Choices)

Sustainability: €500m investment including funding for renewable energy, and a Just Transition Fund to deal with the repercussions of implementing a Carbon Tax. (p. 14 of Budget Choices)

Children: €234m focused on Early Childhood Care and Education, paternity leave and affordable childcare. (p. 12 of Budget Choices)

ODA: An additional €144m to increase the aid budget towards the UN target of 0.7 per cent of GNI*. (p. 13 of Budget Choices)

Pensions: A universal pension financed mostly by reducing tax-breaks that currently favour the better-off. (p. 13 of Budget Choices)

Main proposals on Taxation:

TAX REFORM

  • Standard rate all discretionary tax expenditures: €480m
  • Standard rate tax break on all pension contributions: €483m
  • Remove tax refund element for R & D tax credits: €150m
  • Introduce a minimum effective corporate tax rate: €1,000m
  • Reintroduce the 50% annual cap on past losses that can be offset against current profits for individuals and corporations: €100m
  • Equalise the excise duty on diesel and petrol: €102m
  • Increase tax on in-shop and online betting by 3%: €150m

The full text of Budget Choices is available here.

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