PEOPLE WHO have lost their job and are living on benefits cannot take any further cuts to their welfare payments in the budget and should be protected, an unemployment lobby group has warned.
The Irish National Organisation for the Unemployed said yesterday the Government risked impoverishing a generation of people and wrecking the country if it sought to cut its way out of the recession rather than raise taxes.
At the launch of its pre-budget submission, Bríd O’Brien accused politicians of “ducking and diving” on the issue of raising taxes while relying far too heavily on cutting public spending. She said this would disproportionately hit the less well off and serve to push the economy deeper into recession.
The organisation says it could eliminate more than half the €15 billion deficit in the public finances by 2014 by abolishing all tax breaks except child benefit and introducing a property/wealth tax for high earners with assets worth more than €1 million.
It advocates applying PRSI and income levies to all income, regardless of source, and abolishing the €75,000 ceiling on PRSI contributions. It also wants to allow tax breaks on pensions only at the standard rate. This would remove the current inequality in the system whereby 80 per cent of the State subsidy to pensions benefits the top 20 per cent of earners.
“They can’t cut their way out of this. If they do we won’t get out of this crisis. The whole issue of taxation must be addressed,” said Ms O’Brien, who pinpointed the huge fall in tax take from €31.7 billion in September 2007 to €22.2 billion in September 2010 as the source of the budget crisis.
She said the Government must properly fund an inclusive and integrated job creation strategy rather than try to implement job creation measures in a cost-neutral manner.
Long-term unemployed people, who now account for some 43 per cent of the unemployed, must also be targeted to prevent de-skilling and depression, she said.
The submission says there should be no further cuts in welfare benefits and argues that living on €196 per week is a major struggle.
It also advocates reinstating the full benefit of welfare for 18- to 24- year-olds, reintroducing the Christmas bonus and ensuring the social welfare system is made more efficient and flexible for jobseekers.
Chair of the organisation Ann Fergus said there was a palpable fear among people on benefits ahead of the budget.
“People who were unemployed took a big cut in the last budget and people just cannot take any further cuts.”