Labour’s Alternative Budget – a new Social Contract would protect workers, families and communities

07 October 2020
  • ObairGhearr, a short term working scheme would save jobs, provide training and restore the link to incomes.
  • Tax increases targeted at wealth and assets, and the ending of wasteful tax breaks would raise €1.8bn to fight the pandemic, improve services and create jobs.
  • Overall Labour commits to a stimulus of nearly €5bn, and a further €6.4bn Covid-19 contingency.

Launching Labour Party proposals for Budget 2021, Finance Spokesperson Ged Nash outlined plans to deliver a new social contract, ensure tax policies reward work over wealth, and invest in public services and job intensive capital projects.

Deputy Nash said:

“For Budget 2021 Labour wants a new social contract that protects workers, families and communities. Covid-19 has revealed some unacceptable truths about the state of our country.

“Our budget would do whatever it takes to save and create jobs and central to our plan is ObairGhearr, a short time work scheme to replace the €2.25bn employee wage subsidy scheme. Our proposal is modelled on the German ‘Kurzarbeit’ scheme to save thousands of jobs through wage subsidies, but also a commitment to reskill and train employees at the same time using the surplus in the National Training Fund, and restore the link to incomes.

“Too many families are struggling to make ends meet, and too many parents are worried about the economic future for their children. The pandemic has only exacerbated the inequalities and insecurity felt by ordinary workers and their families, while the gap between the have littles and have lots has continued to widen.

“In such a health crisis, it would be immoral to cut taxes on wealth like CGT as is being sought by some parties in the government. We would raise growth-friendly wealth taxes that won’t affect ordinary workers, end expensive tax breaks and raise nearly €300m in environmental taxes to fund a just transition. That’s also why one of our key proposals is to increase the fuel allowance to €40 a week, and extend the payment by 4 weeks recognising the impact of the Carbon Tax and Covid-19 on older people who will spend more time at home.

“Labour would create a new home retrofit incentive to allow for tax relief for those who get energy efficiency work done to their homes. This would be capped for incomes up to €100,000, targeting the support at middle income households and modelled on the previous Home Renovation Incentive. It would create jobs, and help our efforts to reduce emissions. This is one of the many job intensive proposals we are proposing for Budget 2021.

“We would also introduce 28,000 new training and upskilling places for young people who have borne the brunt of the Covid-19 recession. We cannot afford to leave a generation behind

“Our stimulus would include an extra €2 billion of capital investment, including a commitment to build an extra 10,000 social and affordable homes in 2021 to pick up the slack from the private sector as advised recently by the ESRI., alongside projects in health, transport and education.

“Our proposals are targeted at saving and creating jobs. Our tax proposal will build real fiscal sustainability into our tax base without affecting our growth, while we are committed to borrowing to invest, and continue Covid-19 supports.”


Labour’s Alternative Budget document is available here:

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