“Pick’n’mix package will not lay foundations for sustainable growth

Cuts to USC and inheritance tax will benefit better-off

Social protection recipients will benefit by just €1.72 per week in real terms

October 11th: nite today accused the Government of producing what Regional Secretary Jimmy Kelly termed a “political Budget without an economic strategy”.  In an initial response to Budget 2017, the union was particularly scathing about the decision to cut USC and inheritance tax which, it said, would disproportionately benefit the better off.  Unite’s Pre-Budget Submission is available for download here.

“Today’s pick’n’mix package was essentially a Fianna Fail production with Fine Gael actors and the Independent Alliance making noises off-stage.  As such, it is a political Budget designed to appease a range of political players while lacking an overall economic strategy for sustainable growth.

“By choosing to cut USC and inheritance tax, rather than to increase taxes on capital and wealth and raise Employer’s PRSI to fund a Social Wage, the Government clearly prioritised the interests of the better off over the living standards of ordinary working people. They also missed an opportunity to confirm abolition of water charges and desist from further waste of public monies on a utility with no democratic mandate.

“Unite has consistently argued against cutting USC.  The effect of the cuts announced today will be that a worker earning 20,000 will benefit by €106 – while their boss earning €100,000 will pocket €356”, Jimmy Kelly pointed out.

“The biggest challenge facing working families is the high cost of living – from housing to healthcare and childcare.  But the Government’s ongoing reliance on the private market to address these issues is likely to prove counterproductive”, Jimmy Kelly pointed out.

“For example, many working families will welcome the increased childcare support, but there is a danger that, without additional childcare places, this will merely drive up the price of childcare”,

“By the same token, the Government’s solution to the housing crisis is to introduce a first-time buyer’s tax break which will simply drive up property prices and line the pockets of developers – and, because it’s in the form of a tax-break, will be inherently regressive.  This heralds a worrying return to the days of ‘tax-break-led’ development.  At the same time, the Government is extending tax breaks for the same landlords who are increasing rents to unsustainable levels – rather than examining public-led models of rental housing provision.

“Social Protection recipients were among the hardest hit under austerity, with half of those on disability, jobseekers or lone parents officially classified as living in deprivation.  They would need an increase of €22 just to bring them back to 2009 levels.  Against that benchmark, today’s increases – which, after inflation and taking account of the delayed March implementation, will be just €1.72 per week – will have a negligible impact on the living standards of some of the most disadvantaged groups in our society.

“This Budget will do little to repair the ravages of recession – and, given the lack of an overall economic strategy and renewed reliance on tax breaks and market provision, will do little to promote a long-term sustainable economic recovery”, Jimmy Kelly concluded.