Labour publishes Economic and Fiscal Policy proposals

25 January 2020

Speaking at the launch of Labour’s Economic and Fiscal Policy, the Labour spokesperson on Finance, Public Expenditure and Reform, Joan Burton, said that Fine Gael and Fianna Fáil were seeking to drag Ireland away from European norms and standards along with Britain, while only Labour was committed to a European democratic economy with high quality public services.

Joan said: “Fine Gael and Fianna Fáil’s manifestos lack any kind of serious determination to prevent another economic crash and they will both increase economic inequality.

“Fine Gael is proposing income tax cuts that will only benefit the top 20% and which will take €2.5 billion a year out of public spending on housing and health at a time when nearly 4,000 children are in emergency homeless accommodation and over 200,000 children are waiting for hospital appointments. The ESRI has said that this tax cut alone will make Ireland as unequal as Britain, moving us away from the European average.

“Fianna Fáil have resorted to McCreevy style economics offering property-based tax breaks, and tax giveaways that will benefit developers and landlords, not regular workers and families, and they are promising to slash Capital Gains Tax by a quarter, which will benefit the wealthy.  Both Fine Gael and Fianna Fáil have shown that they do not represent ordinary working people. They are being reckless with the public finances in order to win the election, regardless of the major risks from Brexit, climate change and a slowdown in international trade.

“Labour has a vision of how Ireland can be more like other North European countries. Our economic policy will grow the economy through investment in poorer regions and provide a right to in-work training for workers to drive productivity growth and higher wages.

“Only Labour is focused on reducing waste, getting greater value for public investment and reducing inequality. Our budget approach allows for at €5 for pensions and social protection every year, expands income tax bands in line with wage inflation and will create a €2 billion capital spending fund to ensure that Fine Gael’s mismanagement of the children’s hospital is not allowed to delay life-saving investment in hospitals around the country.

“Labour will stop the waste of public money, build homes and fix health.”

ENDS

THe Labour Party proposals on our Economic and Fiscal Policy is available here:

https://www.labour.ie/download/pdf/labour_economic_and_fiscal_policy_ge2020.pdf 

KEY LABOUR PARTY ECONOMIC AND FISCAL POLICY POINTS

  • The Labour Party is using the Department of Finance projections of a baseline of €11 billion of additional fiscal space and expanding that further by €2 billion.
  • Our economic policy document outlines how we will grow the economy, create sustainable jobs and manage the public finances to pay for our policies.
  • We are aiming to decrease unemployment to 4% or less.
  • There is €600 million allocated every year for tax cuts under the Department of Finance projections. While others are using that €3 billion for tax cuts the Labour Party is proposing to use that to index increases for income tax and USC bands and credits at the rate of inflation, and fund annual social welfare increase, ensuring a minimum €5 per week every year increase in SW payments. A €5 increase in all payments will cost approximately €360m in 2021 terms.
  • Within the €8 billion of unallocated current expenditure we have provided capacity for a negotiated public sector pay deal and we expect productivity improvements as part of that deal.
  • We will not increase taxes on ordinary workers but we will providing for taxation increases of a net €400m per year. This is sustainable and achievable within the type of tax increases we are proposing that include: doubling the bank levy by €250m, withdrawal of tax credits for those earning over €100,000 (a policy FG signed up for in the most recent Programme for a Partnership Government), increased compliance, a minimum effective corporation tax rate, increases in Stamp Duty for commercial property and share transactions, carbon tax and other measures.
  • These tax increases are sustainable and achievable. The last Government raised net taxes by over €300m in both of the last Budgets.
  • We will also provide €2 billion over 5 years for a Capital Expenditure Reserve to:
    • Account for the disastrous management by FG of major projects.
    • Accelerate investment in health for acute hospital beds.
    • Fund additional climate action measures and
    • Account for construction inflation.
  • We want a Standing Commission on Taxation, as has been called for by many, 13 years since the last one, we must assess every condition in the tax code, shut down loopholes and avoidance schemes.

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