Unions urge huge housing boost

The Irish Congress of Trade Unions (ICTU) has urged the Government to allocate an extra €400 million to social housing, household benefits and mental health services next year.

Its pre-budget submission, published today, also calls for a reduction in water charges for households earning less than €80,000 a year, and proposes the introduction of refundable tax credits to ease the tax burden on low-income families.

A Budget for Jobs, Homes and Growth says further spending cuts of €2 billion are not necessary to meet Ireland’s deficit reduction targets. Research by the union-backed Nevin Economic Research Institute suggests a €800 million adjustment is sufficient. ICTU says this should not come through spending cuts, and instead argues for a wealth tax, increased employers’ PRSI on incomes over €100,000, reform of capital acquisitions tax, and higher duties on tobacco, sugar, salt, saturated fat and online betting.

Launching the submission, ICTU general secretary David Begg welcomed a €300 billion EU-wide investment package, announced by incoming EU President Jean-Claude Juncker, which will be delivered through public-private partnerships, the EU and the European Investment Bank.

“There has been a private investment strike in Europe and the public sector has been unable to fill the gap because of debt. Public sector capital expenditure has all but disappeared in Ireland and we urgently need to reverse this trend,” he said.

No cuts

He also warned that there was no room for tax cuts as the budget arithmetic meant any cuts would have to be funded by increased taxes elsewhere or through reduced spending. “Tax reform in the shape of refundable tax credits would be beneficial on employment and equity grounds. On the other hand an increase in the standard rate tax band or a reduction in the marginal income tax rate would not benefit the majority of PAYE taxpayers,” he said.

ICTU says the current system of tax credits has a limited impact for many low-paid workers because they don’t earn enough to use their full tax credit. “The introduction of refundable tax credits would tackle this issue as the unused portion of their tax credits would be refunded to such workers. A study undertaken for Social Justice Ireland identified that 130,000 low-paid workers and their families would benefit from refundable tax credits,” said Begg.

He said only households with a combined income of over €80,000 a year should have a net household water charge next year. “Access to water is a human right. Moving to a system of regressive user charges risks plunging vulnerable households into water poverty. The announced system of free allowances is insufficient to prevent households from falling into water poverty as well as being an inefficient and expensive policy tool,” he said.