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Budget Analysis

As a policy objective, Ireland can remain a low-tax economy, but not one incapable of adequately supporting necessary economic, social and infrastructural requirements. Our current low tax/low investment model is not sustainable and we regret that Budget 2020 did not take greater steps to address this.

We have been analysing and critiquing the Government’s annual budget since 1988, outlining proposals in advance and providing detailed analysis when the Budget is announced. Here, we draw attention to some of the policy areas where progress has been made.

Budget 2020 does not contain the ‘bold and new decisions’ required to meet the ‘defining challenge’ of climate change, and there was no progress on examining subsidies that the CSO has highlighted as potentially environmentally damaging.

Social Justice Ireland has repeatedly called for increased scrutiny of tax expenditures as part of the budgetary process. We regret that in Budget 2020, at a time when the Minister for Finance has made a point of repeatedly noting the scarcity of available resources, government has ignored a real opportunity to increase the total tax-take whilst making the tax system fairer.

In allocating just €2m of additional funding to the RTB for investigating and sanctioning non-compliance with the Rent Pressure Zone measures, and no additional funding for rent inspections and sanctions under other landlord and tenant legislation, the Government has shown that they are not serious about protecting tenants. 

Social Justice Ireland welcomes the Budget 2020 decision to increase the carbon tax from €20 per tonne to €26 per tonne. This is the first significant increase in the tax since it was introduced almost one decade ago, and we also welcome the commitment to ringfence the revenue to deal with the transition to a more carbon neutral economy.

Extending the Help to Buy Scheme for an additional two years subsidises the better off at the expense of providing sustainable and affordable homes for those in most need.

The United Nations' Sustainable Development Goals aim to leave no one behind. With minimal progress on these in recent years, Budget 2020 reinforces Ireland's position as a laggard.

While welcoming the small increase in Overseas Development Assistance in Budget 2020, Social Justice Ireland is disappointed that this will not result in any significant improvement in Ireland’s ODA in terms of national income. We call on government to develop and publish a roadmap to reach the UN-agreed target.

What income changes arose from the tax and benefit measures taken in Budget 2020? What are the effective tax rates now for different levels of income, and how do they compare with effective rates over time? Click here to see.

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