Budget 2015 should protect the vulnerable, invest in social housing and disability services and roll out rural broadband

Budget 2015 should:

• Increase the PAYE tax credit and welfare rates by €5 a week.
• Increase the PAYE tax credit and welfare rates by €5 a week.
• Prioritise investment in social housing and disability services.
• Provide broadband in all rural areas.
• Introduce a minimum effective corporate tax rate of 6%.
• Reduce borrowing below 3% of GDP in 2015.

In a Policy Briefing on 'Budget Choices' Social Justice Ireland  sets out a range of fully-costed proposals for Budget 2015 that would: (i) see Ireland’s borrowing reduced; (ii) increase investment in Ireland's social infrastructure; (iii) make the tax system fairer; (iv) protect public services and vulnerable people and the communities in which they live.

These proposals include:

• A €250m investment to address the social housing crisis.
• A €200m investment in broadband focussed on rural areas.
• Significant additional investment in disability services.
• A minimum effective corporation tax rate of 6% (i.e. no corporation would pay less than 6% of their profits in corporation tax) as a step towards ensuring large corporations pay a fair share of tax.
• An increase of €5 a week in the PAYE tax credit and in the basic social welfare rates to go towards addressing the increase of between 5% and 8% since 2008 in the cost of providing a minimally adequate standard of living.
• A reduction in borrowing to below 3% of GDP.
• 19 further initiatives covering a wide range of policy areas.

In this Briefing, Social Justice Ireland outlines how all of its proposals can be financed while reducing borrowing to below 3% GDP in 2015.  All the costings are based on Government calculations and reliable research. 

Three different scenarios are outlined depending on the scale of the budget adjustment required to reduce borrowing to below 3% of GDP in 2015 i.e. €2bn, €1bn or €0.

A Budget along these lines in 2015 would be good for the economy, good for those on low and middle incomes, and good for Ireland. It would be fair and just and would be seen as such.

To date, the present Government’s approach has protected the rich at the expense of the rest of society.  There is an urgent need to reverse the regressive nature of each of the Budgets introduced by the current Government since they came to office in 2011.

Budget Choices’, presents a fully-costed series of proposals for Budget 2015 that would see Ireland’s borrowing reduced below 3% of GDP, provide substantial targeted investment, and introduce a minimum effective corporate tax rate. It would also protect and enhance public services and increase the incomes of the working poor and those on social welfare.

 To date the burden has fallen hardest on those who could least afford to carry it.  In the proposals outlined in our briefing the focus is on shifting the balance towards increasing the total tax-take by creating a fairer tax system, protecting public services and the social infrastructure while creating much-needed jobs.

 The proposals outlined in this briefing are feasible and possible in Budget 2015.  They would generate investment, address some key infrastructural challenges such as social housing and broadband and create jobs.

The full Policy Briefing on Budget Choices 2015 may be accessed here.

Summary of Key proposals

Among our major proposals are the following:

1. Reduce borrowing by €1bn. (Page 4 of Budget Choices Policy Briefing)

2. Invest €250m in Social Housing and €83m in capital expenditure. (p.12)

3. Invest €200m in rural broadband infrastructure. 

4. Introduce a minimum effective corporate tax rate that would ensure that all corporations in Ireland pay at least 6% tax on their profits here.  (p.9)

5. Make tax credits refundable in Budget 2015.  At a cost of €140m this proposal would directly benefit 113,000 low income individuals and begin to address the ‘working poor’ issue.  (p.11)

6. Maintain and extend the USC levy of 3% to all income in excess of €100,000 irrespective of its source.  This would increase revenue by €171m.  (p.11)

7. Increase Social Welfare rates by €5 in 2015.  (p.15) 

8. Increase the PAYE Credit by €5 per person in 2015.  (p.10)

9. Introduce a Financial Transactions Tax which would yield €150m in 2015. (p.11)

10. Introduce a universal basic pension payment for all people over the age of 65 from January 2015.  This would be set at €230.30, the current level of the Contributory Old Age Pension.  Standard rating the tax break for all pension contributions to 20% would increase the tax-take by €710m in 2015 and would  fund the universal basic pension payment.  This would be a fairer and more equitable way of organising the pension system in Ireland. (p.14)

11. Introduce a tax of one third of one cent on each text sent by SMS through mobile phones or any other devices.  This would provide an additional €26m in taxation revenue in 2015. 

12. Introduce a ‘bad nutrition’ tax on the main components of junk food, fast food and soft drinks to yield €15m in 2015. 

13. Invest €65m to enable 12-15 community nursing facilities with approximately 50 beds each to be replaced or refurbished in 2015. (p.13)

14. Invest €50m for the infrastructural development of Primary Care Teams in 2015. (p.13)

15. Invest €50m for the infrastructural development of Children and Family Services. (p.13)

16. Invest €35m to support the development of Community Mental Health teams.  (p.13)

17. Introduce an income contingent student loan facility to allow students to borrow to pay for third level fees and living costs.  This would save the exchequer €445m in 2015. (p.13)

18. Invest €140m in quality facilities and training for Early Childhood Education and Care. (p.13)

19. Invest €50m in Adult Literacy  and second chance education programmes. (p.13)

20. Invest €100m in the provision of services for people with disabilities. (p.15)

21. Increase the tax take on online gambling to 5% to yield €100m.

22. Standard rate all discretionary tax expenditures that cost over €10m per annum in Budget 2015. (p.9)

23. Increase the ODA Budget by €60m to reach 0.45% GNP in 2015. (p.20)

24. Implement savings in the public procurement process to yield €198m in 2015.

25. Reduce public expenditure through measures identified in the Comprehensive Expenditure Report 2012-2014 and the Haddington Road agreement.

Our proposals if the adjustment required is larger or smaller than our core projection are set out on page 18 of the Policy Briefing.