Division of budget 'hit' unfair, says social justice chief

THE INTERNATIONAL Monetary Fund (IMF), European Union (EU) and Government have targeted the poor, sick and low paid while protecting the rich, director of Social Justice Ireland Fr Seán Healy said yesterday.

Fr Healy said the distribution of the budgetary “hit”, which will mean €15 billion in cuts and additional taxes by 2014, was unjust and unfair.

As part of the EU-IMF bailout, the Government has pledged to reduce the State’s deficit to 3 per cent of gross domestic product (GDP).

Some €10 billion will be sourced through cuts, while taxes will be increased by €5 billion over the next four budgets, beginning with next week’s budget.

Fr Healy said while the IMF and Government have said poor people will be protected and “everything is on the table”, they also insist senior bondholders cannot be asked to bear any part of the burden. The corporation tax rate cannot be increased and a greater part of the adjustment will come through cuts instead of tax increases.

“This approach is hypocritical and deeply unjust. Either everything is on the table or it is not,” he said. The figures should be reversed with €10 billion coming from taxes and €5 billion from cuts, Fr Healy added.

Over the next four years, policy should focus on increasing Ireland’s tax take from 29.4 per cent of GDP to 34.9 per cent, a figure defined by Eurostat as low tax.

“As a policy objective, Ireland should remain a low-tax economy, but not one incapable of adequately supporting the economic, social and infrastructural requirements necessary to complete our convergence with Europe,” he said. He urged the Coalition, IMF, European Central Bank and EU to act fairly and reverse the distribution of the “hit”.