SINN FÉIN has proposed a wide range of new taxes for higher earners as the core of the €5 billion savings package contained in its 2011 pre-budget submission.
The vast bulk of the €5.266 billion in savings proposed by the party will come from increased taxes.
Some €4.1 billion or 80 per cent of the package will be derived from new tax measures, most directed at higher earners, with the remaining €1.15 billion coming in public sector cuts, mostly from the salaries of senior employees.
The main components of the tax measures are a new wealth tax; a new 48 per cent tax for high earners; the standardising of all discretionary tax reliefs; an abolition of the PRSI ceiling; and increases in transaction taxes.
The cuts in spending are targeted at salaries. Sinn Féin has proposed a cap on the salaries of Ministers and TDs, as well as a cap of €100,000 on all public service salaries.
It says a further €500 million in savings will be achieved by charging fully for private use of public hospital beds and by reducing the costs of medicines.
The document, There is a Better Way, was launched at a press conference in Dublin yesterday by party leader Gerry Adams, Dáil leader Caoimhghin Ó Caoláin and finance spokesman Arthur Morgan.
Mr Adams restated Sinn Féin’s opposition to the target agreed by the other main parties that the State’s deficit should be cut to 3 per cent of national income by 2014.
He said the aim could not be achieved as there were too many cuts in too many places in too short a timeframe.
Instead, Mr Morgan outlined a six-year plan to achieve the target. He said the Sinn Féin plan was based on a prediction for economic growth of 3 per cent per annum.
Mr Morgan and Mr Ó Caoláin also outlined plans of the party’s stimulus programme.
The party, in its submission, has advocated the transfer of €7 billion from the National Pension Reserve Fund to be used for a “financial stimulus” package over the next six years.
The document has not gone into specific detail on the programmes but it has argued, generally, for projects that would be “labour-intensive”.
These include schools, hospitals, social housing, energy efficiency and public transport.
Separately, the party has provided for €595 million of the funds raised from the 2011 budget to be allotted to refundable tax credits for poorer families; the return of the Christmas social welfare bonus; and other measures that will benefit those on lower income and on social welfare.
Mr Adams said the policy was about making choices, protecting the economically vulnerable and going after those who earn the most.
“Those [earning over €100,000] who are facing a third tax of 48 per cent, a lot of them are patriotic people who have a good social conscience.”
MAIN PROPOSALS €5.266BN SAVINGS; €595M STIMULUS:
- €5.266bn gross savings in 2011
- €595 million stimulus package
- Cut national deficit to 3 per cent over six years
TAXES
- Standardise discretionary tax reliefs: saves €1.1bn
- 48 per cent income tax for incomes over €100,000: raises €410m
- Income-linked wealth tax of 1 per cent on non-farm assets: raises €1bn
- Abolish PRSI ceiling (currently €75,000): raises €119m
- Increase capital gains tax to 40 per cent: raises €240m
- Increase DIRT to 30 per cent from 25 per cent: raises €123m
- Increase taxes on second homes to €600: raises €120m
CUTS
- Cap ministerial salaries at €100,000; TD salaries at €75,000
- €100,000 maximum salary for public sector and semi-State employees
- Reduce professional fees by 25%
- Charge full price for private beds in public hospitals
- Reduce cost of medicine and overheads in health sector by reducing waste and buying generic drugs.