Spend on child poverty and public transport instead of cutting tax, union leader says

The Government should choose to prioritise meaningful initiatives on issues such as child poverty and public transport in the budget over what would be insignificant tax cuts aimed in many cases at people who don’t need them, according to the Irish Congress of Trade Unions (Ictu).

Ictu general secretary Owen Reidy said the organisation made the case for additional spending on Monday when he and other officials met Minister for Finance Michael McGrath and Minister for Public Expenditure Paschal Donohoe to discuss its budget submission, Making Work Pay.

Mr Reidy described the meeting as “a positive engagement” which included “a wide-ranging discussion” of Ictu’s 40-page document.

In it, the umbrella body for Irish trade unions argues for increased taxes, greater spending on services and investment in key areas such as water and renewable energy infrastructure.

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The organisation says its position on the raising of additional revenue is in line with the recommendation of the Commission on Taxation and Welfare and enjoys widespread public support, with the main Government parties, it contends, failing to appreciate the shifting priorities of their own voters.

[ Budget 2024: Looks like a tax cut of €800 to €850 a year for middle earners ]

“The polls show most people want to prioritise spending on public services like health and education,” Mr Reidy said after the meeting. “I think something has clearly shifted in the wake of the pandemic. People are looking to a properly resourced State to protect society from future shocks.

“That seems to be at odds with the mood in Fine Gael and Fianna Fáil because if you looked at Fine Gael during the summer, their people were talking about giving €1,000 to everyone in the audience while Fianna Fáil have been talking a lot about cuts to USC.

“But what we have asked is that they look at what they could do with that €1 billion-€1.5 billion instead of giving people like me €16 or €20 a week when we really don’t need it.

“According to the Minister for Transport, the cost of making public transport free would be around €600 million while the ESRI says that the cost of a second tier of child benefit that would take 40,000 children out of poverty would be €700 million. These are the sort of fundamental things we could do and I know I’d much prefer 40,000 kids being taken out of poverty than getting an extra €18 in my pay.”

In relation to corporation tax receipts, Ictu argues for the money to be treated entirely as a windfall and put into long-term investments. The organisation argues it could be used for the funding of a green investment fund, a housing provision semi-State and a savings vehicle intended to help pay the increased costs associated with the country’s ageing population.

More immediately, however, Mr Reidy also believes there should be action to help those on low incomes.

“Social welfare rates should be increased by at least €25 because those people on low pay and fixed incomes have suffered disproportionately over the past year or so, while we’d also like to see measures to improve the quality of jobs because even at a time of very low unemployment 18 per cent of people, nearly one in five, are in low paid employment and that’s much higher than in the sort of countries Ireland likes to benchmark itself against.”