Tax windfall must be put into the pockets of those who need most help

04 July 2022
  • Bringing budget forward by two weeks a ‘token exercise’ if only €400m to be spent up to Christmas
  • Government can bring in targeted Back To School measures before Dáil break
  • A billion in tax cuts a dangerous con-job

Responding to the publication of the Summer Economic Statement, Labour’s Finance spokesperson Ged Nash said:

“The Summer Economic Statement confirms that tax revenues are powering ahead.

“This tax windfall must be put back into the pockets of those who need help the most.

“Up to €3 billion of the €6.7 billion budget space which the government will make available is already committed to meet existing health, welfare and other calls on the public finances.

“This leaves just €2.7billion to allocate in additional social protection, education, childcare and related spending on services and supports with only a miserly €400m slated to help people through the cost of living crisis to the end of the year. Most of this additional spending for public services will barely keep pace with inflation.

“This makes the idea of allocating a total of €1billion in tax cuts, double what was previously planned, all the more inadvisable.

“Everyone from the ESRI to the Irish Fiscal Advisory Council have advised against inflationary cuts to taxes. It is especially wrongheaded when we are approaching technical full employment.

“The best way to support working households is not through tax cuts and a narrowing of the tax base but to provide targeted supports such as including more families in the Back to School Allowance and fuel allowance scheme through our sophisticated welfare and tax system, and cutting childcare costs for working parents.

“Similarly, government should rule out a rerun of the poorly targeted €200 per home energy credit. This short-term political stroke will do nothing to solve the long-term problem of rising energy costs.

At a cost of €380million to date that money could help fund a €200 carbon credit for families with incomes under €50,000 at a cost of €100million. The remainder should be used to bring 150,000 working households at risk of poverty into warm embrace of the fuel allowance net.

“Overall, the Statement shows just how well the economy is doing right now. However, this does not tally with the experience of hard-pressed households across the country who are at the sharp end of rising energy and food costs.

“Strong GDP figures of themselves won’t help pay the bills or get the kids back to school. Good, fiscally sound decisions made now by government will.

“Moving the budget ahead by fourteen days is a token exercise. Many of the measures they say they have conceded to – such as an additional weekly core social welfare payment – can be done at the stroke of a pen and should be done now.”

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