Jimmy Kelly warns austerity is entering a new phase: recovery for a few, continued squeeze for the rest
October 14th: In an initial response to Budget 2015, trade union Unite today (Tuesday 14 October) accused the Government of squandering the recovery and said that low and average earners, as well as Social Protection recipients, will lose out in a Budget which will see most people experience a real drop in living standards.
Unite pointed out that, for many people, any changes in the income tax and USC systems will be cancelled out by water charges – and those workers who do not earn enough to pay tax will not benefit at all from the water tax credits. The union said that the Government’s desperate attempts to ameliorate the impact of water charges following last Saturday’s Right2Water demonstration had simply created more anomalies.
“This is a Budget of missed opportunities”, Regional Secretary Jimmy Kelly said.
“The Government is squandering the recovery. Rather than focussing on boosting low incomes – and thus the economy – by introducing refundable tax credits and removing the PRSI trap for many low earners, as proposed by Unite, the Government chose to reduce tax at the higher end.
“But a staggering 70 per cent of people in the workforce – those on less than €32,800 per annum – will derive no benefit from today’s income tax changes, and will benefit only marginally from changes to the USC, which will be offset by the water charges in a large number of cases.
“It is clear that water charges are the elephant in the room of the Government’s budgetary policy. Despite the Government’s desperate attempt to ameliorate the charges in the wake of last Saturday’s Right2Water demonstration, they have simply created additional anomalies.
“Hundreds of thousands of super-low-earners – those who are not in the tax net – will derive no benefit from the water tax credit or other tax changes, and will not be eligible for the Household Benefits package extension”, Mr Kelly pointed out.
“Nor will the small increase in Child Benefit – just over €1 per week per child, or less than the price of a litre of milk – offset the impact of rising childcare and back-to-school costs, or offset continuing real cuts in Social Protection payments, the value of which are falling after inflation is taken into account.
“Contrary to Government spin, investment in public services continues to be squeezed. In 2015, the public services on which low-income groups rely will suffer a real cut after inflation.
“While Unite welcomes the abolition of the so-called ‘Double Irish scheme’, we are concerned that the patent box may just create new opportunities for tax avoidance.
“Overall, Budget 2015 indicates that austerity is not over – it is merely entering a new phase, with recovery for a few at the top and a continued squeeze on living standards for the rest of us”, Jimmy Kelly concluded.