Combined tax package will disproportionately benefit better-off

October 10th: In an initial response to what he termed today’s ‘unambitious Budget’, Unite Regional Secretary Jimmy Kelly criticised the over-reliance on tax and USC cuts which, he said, disproportionately benefited the better off while doing little to raise living standards across the board.

“Today Minister Donohoe announced a Budget with neither vision nor ambition: a budget designed to offend no-one while achieving little.

“As a result of the changes to tax and USC, most people will only be better off to the tune of a few litres of milk and a couple of loaves of bread per week – yet every Euro lost to the Exchequer in tax cuts is a Euro less for the public services on which we all depend”, Mr Kelly said.

“The extension of the standard rate tax band is worth nothing to those who do not earn enough to benefit, while the cuts in USC will disproportionately benefit those earning close to the upper limit.

“Unite is disappointed that the Government has decided to retain the special 9% VAT rate for the hospitality and tourism sector – a subsidy to profitable companies which is of no economic or social benefit.

“Meanwhile, the Government has again missed an opportunity to start increasing Employer’s PRSI to European averages in order to fund universal public services and in-work supports – measures which would raise living standards and disproportionately benefit low and average income earners.

“At the same time, they have failed to fully restore Social Protection payments to their pre-recession levels – and such increases as have been announced will only take effect next March.

“The increase in the Minimum Wage, while welcome, still means that the lowest paid workers in our society will continue earning substantially less than the Living Wage, currently calculated at €11.70 per hour – and the Government does not appear to have any medium-term strategy to align the Minimum Wage and the Living Wage.

“It seems that Minister Donohoe still has not learnt a fundamental lesson:  every Euro extra for low and average earners – whether through increased wages, enhanced income and in-work supports or improved public services – is a Euro extra which is injected straight into the economy.

“Today’s Budget will neither lay the foundations for an ongoing sustainable recovery, nor for an improvement in the living standards of ordinary working people”, Jimmy Kelly concluded.