Budget 2021 contained many missed opportunities

Posted on Friday, 23 October 2020
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Budget 2021 was the first chance for this Government to show how seriously it is taking its commitment to the creation of a new social contract - an opportunity regrettably missed.

Covid-19 gave Budget 2021 unique context. The economic and fiscal disruption created by the pandemic-related restrictions and lockdown measures presented an unprecedented challenge in framing this budget. But the broad public desire for a new paradigm, the relaxation of the Stability & Growth Pact, and the low cost of borrowing also presented an opportunity.

In our Budget Choices 2021 briefing, Social Justice Ireland called for a number of measures that would be key first steps towards building that new social contract. We regret that many important and achievable goals were ignored.

Among the most regrettable aspects:

  • The continued absence of ring-fenced funding for Sláintecare infrastructure;
  • The lack of acknowledgement of the need to benchmark core social welfare rates, with the most vulnerable in society being ignored for the second year in a row;
  • The absence of a commitment to targeting 20 per cent of the housing stock to be social housing;
  • The maintenance of the wasteful Help to Buy scheme;
  • The lack of movement towards creating a Cost of Disability payment;
  • The refusal to fully equalise Jobseekers’ rates for under 25s;
  • The ignoring of the need for increased scrutiny of tax expenditures as part of the budgetary process.

The deficit in funding for the Community and Voluntary sector (estimated at circa €500m) was also largely ignored.

It is clear that the building of a new Ireland and the creation of a new social contract require balance between the economy, society and the environment. With Budget 2021, Government has chosen to focus on only the economy.

A vibrant economy is important, and supports for businesses are certainly needed, but the huge social and environmental challenges already faced before Covid-19 either remain or are being exacerbated by the pandemic.

Budget 2021 has not done enough to address the environmental and social challenges, instead focusing on the economy hoping the rest will follow. As we have pointed out for years, this simply does not work. 

We need more investment in infrastructure and services to develop a thriving economy.  We need just taxation to fund this.  We need good governance to ensure people have a say in shaping the society they live in.

We also need to ensure that everything that is done is sustainable; environmentally, economically and socially.  These issues must be resolved together. 

We recently published Building a New Social Contract – Policy Recommendations, a comprehensive overview of what is needed as part of a new Social Contract appropriate for Ireland in the 21st century. While containing many positives, we regret that Budget 2021 has not moved us far in the direction of achieving this vision.