Election 2024

Labour will not offer tax cuts, instead commits to investment in housing and childcare

Party pledges to introduce an SUV tax based on the weight of new petrol and diesel cars which it says will ‘tackle car and SUV bloat’

Labour Party leader Ivana Bacik settings out six 'key missions' at her party's election manifesto launch on Sunday. Photograph: Pat Leahy
Labour Party leader Ivana Bacik settings out six 'key missions' at her party's election manifesto launch on Sunday. Photograph: Pat Leahy
Pat Leahy
Sun Nov 17 2024 - 18:56

The Labour Party will not offer tax cuts but will instead commit to sustained investment in housing, childcare and public services over the next five years, party leader Ivana Bacik and finance spokesman Ged Nash promised on Sunday as they launched their manifesto for the general election.

Instead of “shrinking the tax base” with tax cuts, Mr Nash said, Labour would pledge to automatically index tax bands and credits, as well as social welfare rates. Labour would remove the means test for the carers’ allowance, introduce a cost-of-disability payment and also a second tier of child benefit for children in poorer households.

It would set up a new public childcare system with 30,000 places by the end of the government’s term of office, initially located in public buildings but with new facilities added adjacent to schools. Labour would also cap childcare costs at €50 per week. Existing childcare businesses would be able to join the public system.

Some 50,000 extra public servants would be needed over the next five years, Labour says, to deal with extra pressures on public services, and the party also committed to establishing a State building company where construction workers would have public sector pay scales, increments and pensions. The new State company is essential to delivering housing targets of 50,000 new homes every year, plus 50,000 home retrofits, the party said.

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The Labour plan is to transform the existing Land Development Agency into the State building company, which over time will employ its own building workers in “secure, well-paid and pensionable jobs . . [with] collective bargaining rights and trade union recognition”.

Ms Bacik said she had “very positive feedback” about the plan for a State construction company, but she did not have a figure on how many workers it would employ.

Labour’s manifesto sets out six “key missions” which will be the priorities for Labour in government, Ms Bacik said.

She said Labour will build more homes, give working people a new deal, take action on climate change and a just transition, transform the health service, implement a cost-of-living action plan and a charter for children’s rights.

The document contains plans for average net spending increases of over 5.1 per cent over the next five years – amounting to some €40 billion.

It proposes annual additional income from new taxes of €400 million – including doubling the bank levy and a new wealth tax. It also pledged to introduce an SUV tax based on the weight of new petrol and diesel cars which it said would “tackle car and SUV bloat”, though officials said this was not a revenue-raising mechanism but rather a device to incentivise car manufacturers to provide smaller and lighter vehicles.

It also said that expected savings from a “healthier population, better educated workforce, reduced homelessness and waiting lists, digitalisation and less emergency spending on measures like agency staffing” would arise because of “better planning.”

The party also promised a “comprehensive review of public spending and waste”.

Ms Bacik was reluctant to be drawn on the party’s red lines for coalition negotiations, but said she would speak to the leaders of the Social Democrats and the Green Party after the election with a view to agreeing a common centre left platform to negotiate a programme for government with one of the big parties. She said she had not had any preliminary discussions with those parties.

Pat Leahy

Pat Leahy

Pat Leahy is Political Editor of The Irish Times