Government accused of pandering to voters with ‘extra week’s wages’ Budget
Every worker in Ireland has been promised an extra week’s wages by the coalition government ahead of an imminent General Election.
In its final Budget before the country goes to the polls, the Fine Gael/Labour administration unveiled a €750m giveaway Budget – the first since it came to power.
Critics have depicted it as an attempt to soften the electorate.
The only tax rises announced was 50c on a packet of cigarettes.
Young families and pensioners in particular were targeted with a series of measures putting cash back in their pockets.
Key among the pledges is the reform of the much-despised Universal Social Charge.
Finance Minister Michael Noonan said an overhaul of the tax, brought in after the country was saddled with billions of euro in banking debts, would save citizens hundreds of euro.
“All workers will gain a full extra week’s wages,” he said.
Public Spending Minister Brendan Howlin said Ireland was “back from the brink” and as Europe’s fastest growing economy could now afford to pay back “the hard work and resilience of the Irish people”.
But Jimmy Kelly, Ireland secretary for the Unite trade union, branded the tax and spend package as an attempt to win votes.
“This is not only an election budget – it is clearly a Fine Gael election budget from which any Labour fingerprints have been carefully wiped,” he said.
After years of public sector cutbacks, the coalition announced more doctors, more nurses and more gardaí.
Young parents, many who were hardest hit by the crash, were wooed with a family-friendly health, education and welfare spending package.
Among the sweeteners is free childcare for children from three years of age until they are five and a half, or until they start primary school.
Child Benefit payments are to go up by five euro from next year, to €140 per month for every child.
Two weeks statutory paternity leave is being introduced for the first time.
Free GP care, currently only available to under 6s (and over 70s), is being extended to all children under 12 years, it was confirmed.
Looking to shore up the “grey vote”, the coalition promised a three euro hike in the weekly old age pension.
It is also the first time the payment has been increased since the economic collapse.
Other benefits include a rise of €2.50 in the fuel allowance, up to €22.50 a week, and a 75% Christmas bonus for those on long term welfare payments.
Fears that rising house prices, as the market bounces back, would mean higher property taxes were vanquished.
Revaluations due on homes next year for the Local Property Tax were postponed for three years.
There was no change to the price of wine, beer or spirits or for petrol and diesel.
Here are some of the finer details:
* USC reduced to 5.5% for wages from €18,668 to €70,000; 3% for the next bracket from €12,012 to €18,668; and 1% on the first €12,012 for anyone earning more than that.
* The respite care grant is restored to €1,700.
* Hauliers were given a massive boost with tax on commercial vehicles to be cut to a maximum of €900.
* On inheritance and gains taxes, parents will be able to transfer a property asset worth 280,000 tax free while a new 20% rate for capital gains tax will apply on business sales up to one million euro.
* The levy on banks following the multi billion bailout will run until 2021 to bring in €750m.
* Tax credits have been changed to benefit the self-employed, farmers and carers worth hundreds at a time.
* The new knowledge development box is being set up which will allow companies to pay 6.5% corporation tax on some business activity depending on their investment in innovation and R&D in Ireland.
Elsewhere, on spending there will be 600 new gardaí put into training and 2,260 new teacher places made available.
Fianna Fail’s finance spokesman Michael McGrath claimed the Government was targeting the better off for a payback.
“It is depressing that – as with last year – the Government’s priority is not to undo as much as possible of the social harm caused by tough years of austerity but instead to design tax cuts that disproportionately put far more money in the pockets of higher income earners,” he said.
Sinn Fein’s finance spokesman Pearse Doherty accused the Government of putting €182m in the pockets of the top 14% of the country.
“This is not the future that the women and men of 1916 envisioned for their country,” he said.
Mr Doherty added: “It is a nonsense for anyone on the government benches to claim that this budget is a budget with families and small businesses in mind.
“It is budget for the elites, for multi-nationals and high earners. It is anti-sustainable growth, it is anti-investment, and its anti-public services.”
Richard Boyd-Barrett, of People Before Profit, said: “This budget really is a cynical bag of pre-election tricks without any substance whatsoever that will do nothing to deal with the emergency situation in housing and homelessness, the disaster in our public hospitals or do anything to deal with the gaping and growing inequality and poverty in Irish society.”
