Social Justice Ireland presents Budget Priorities to the Select Committee on Budgetary Oversight

Image

Social Justice Ireland addressed the Select Committee on Budgetary Oversight on four key priority areas for Budget 2022; social welfare and income adequacy, taxation, housing and unemployment. 

To view the video of our presentation to the Committee, see below:

We outline our priority areas in more detail below. 

Social Welfare and income adequacy

Proposal: Increase core Social Welfare rates by €19 per week over the next two years, starting with an increase of €10 per week in Budget 2022.
The Covid-19 crisis has highlighted the importance of the social safety net that is our social welfare system. Without the social welfare system 41.4 per cent of the Irish population would have been living in poverty in 2019. In 2019 social welfare payments reduced the poverty rate by over 28 percentage points to 12.8 per cent.  Since then, however, we’ve had two Budgets where core social welfare rates were NOT increased.  This is retrogressive and will lead to Ireland losing the gains it has made in tackling poverty in recent years. Government must commit to benchmarking core social welfare rates at 27.5 per cent of average earnings (which is €222.08 per week) in Budget 2022.   Core Social Welfare rates should be increased by €19 per week over the next two years, starting with an increase of €10 per week in Budget 2022.

Just Taxation

Proposals: Tax expenditures should undergo proper administrative scrutiny and parliamentary debate to ensure they remain fit for purpose and cost-effective.
Budget 2022 offers an opportunity for Government to reform some aspects of the current taxation system in the interests of enhancing fairness and sustainability. It is an opportunity to make some overdue changes which will also provide some additional revenue, particularly in the area of Tax Expenditures.  Given the current state of government finances, a review of Ireland’s approach to tax expenditures is urgently needed. Tax expenditures should undergo proper administrative scrutiny and parliamentary debate to ensure they remain fit for purpose and cost-effective. Social Justice Ireland believes that as part of the budgetary process, the cost of tax expenditures (by type) for each past year should be published, as should the estimated cost of tax expenditures for the year ahead.   Furthermore, when considering whether to implement a proposed tax expenditure, government should be obliged to state publicly: the objective it aims to achieve; the other options considered, and why the tax expenditure is deemed to be the best approach; the likely economic impact of the tax expenditure; and the estimated cost.  There should also be, at the very least, scope for automatic periodic review of each expenditure. The preferable option would be for a sunset clause on each expenditure so that each must be reviewed and judged on its merits.

Housing

Proposals: Close all tax loopholes for large-scale investment vehicles purchasing residential properties and build 14,341 social homes each year for the next 10 years at an annual investment of €3.3 billion.
Ireland is in the midst of a housing crisis, with a totally inadequate supply of social housing and affordable housing.  We call on Government to implement the measures contained in our 10 Point Plan to Deliver Housing For All.  Budget 2022 should expand Housing First to families, providing wraparound services and supports for children and parents; close all tax loopholes for large-scale investment vehicles purchasing residential properties and build 14,341 social homes each year for the next 10 years at an annual investment of €3.3 billion.

Unemployment

Proposals: Resource the upskilling of those who are unemployed and at risk of becoming unemployed through integrating training and labour market programmes and tackle youth unemployment.
A large increase in unemployment numbers seems inevitable; with rates of between 12% and 16% of the labour force possible. Budget 2022 needs to allocate resources to address this challenge and minimise the scale of the increase in unemployment, youth unemployment and the growth of long-term unemployment.  Budget 2022 should resource the upskilling of those who are unemployed and at risk of becoming unemployed through integrating training and labour market programmes; adopt policies to address the worrying issue of youth unemployment. In particular, these should include education and literacy initiatives as well as retraining schemes and expand the age profile for apprenticeships and training programmes to include older workers who may need to re-skill.

Universal Basic Income Pilot

Proposal:  Implement the Programme for Government commitment to pilot a Universal Basic Income scheme.
Social Justice Ireland published a study in May which outlined a proposal for a four-year pilot Universal Basic Income for Artists with limited cost implications for the exchequer.  Our proposal provides Government with the means to enact the main recommendation of the Arts and Culture Recovery Taskforce Report and deliver on its own Programme for Government commitment to a basic income pilot in January 2022.  Budget 2022 should commit to introducing this pilot and funding the evaluation process to accompany it.

Our submission to the Committee is available here.