THE SPIN IS that yesterday’s Budget spreads the benefits to all.
It doesn’t.
It is yet another regressive budget that will re-enforce inequality.
It is summed up by the fact that while TDs will benefit by more than €50 a week*, young unemployed people will get a miserly €2.70.
The biggest losers here are unemployed young people. While the government made much of giving everybody on social welfare payments a fiver (after a delay until March), they made an exception for young people. Instead, they were given a miserly €2.70, increasing them to €102.70 per week.
If you’re on the minimum wage, you also didn’t get a fiver. The 10c increase meant that if you get 39 hours a week, rather than being on less than that, you got €3.90 in the budget.
This is another measure which discriminates against young people considering nearly 40% of all those on the minimum wage are under 40.
It is a budget that benefits high earners, landlords, big businesses and developers, while giving crumbs to low paid workers, pensioners and those on social welfare payments.
The Irish Times ran an article asking “How much better off is the average family after Budget 2017?” Unfortunately, the ‘average family’ presented here was far from average – being a dual income household with incomes of €50,000 each. That income is about double the average. It is an example of how the ‘squeezed middle’ notion is used to suggest that the average person is much better off than they actually are.
In fact, half of all earners in Ireland earn less than €28,500 and half earn over €28,500. In other words, €28,500 is a middle income – not the €70,000 a year that Fine Gael would have you believe.
That average earner will benefit from the cut to USC to the tune of €2.78. Contrast that with a single self-employed person on over €70,000, who will get €14 extra – over five times as much.
The changes to inheritance tax similarly will only benefit those whose parents or relatives have enough wealth to leave enough wealth to go over the threshold. It will act to re-enforce inequality even further.
The biggest winners though are not even those on reasonably high incomes – they are big businesses, landlords and developers. That is because the budget continues the neo-liberal right-wing approach of the previous government – of seeking to incentivise the private sector to resolve problems through profit, instead of directly investing.
For example, the business lobby group IBEC had a wish list that they submitted to the Minister and they were duly granted a number of requests. They had wanted a cut in Capital Gains Tax on sales of businesses from 20% to 10% in order to compete with Britain in the context of Brexit – this was granted. They were also given a tax cut for share options, a reduction of DIRT by 2% a year over the next four years, and an extension of the so-called Special Assignee Relief Programme – a tax break for corporate executives working in Ireland.
In the area of housing, there was multiple reliefs for landlords, a give-away to the developers and precious little by way of investing in actual home building by the state.
An extra €105 million was allocated to the Housing Assistance Payment – more than tripling this total payment by the state to private landlords.
Another €8 million will be spent on mortgage interest relief for landlords – encouraging more to take out new Buy To Lets, increasing competition for a limited supply of housing and driving up prices further.
Contrast that with the total for capital investment in housing of €307 million, with a plan to only build 1,500 local authority houses – despite all the talk of resolving the housing crisis.
The biggest give-away was dressed up as the ‘Help to Buy Scheme’. In reality it’s a ‘Help the Developers Scheme’. When asked on RTE News how this measure would increase supply, Minister Noonan simply answered that the Construction Industry Federation, which represents developers, had assured him it would. This €20,000 for first time buyers of new homes will not result in any extra homes being built – it will just go straight into the pockets of the developers.
It is yet another inequality budget.
*TDs salary will increase from spring of next year under public pay restoration deals under the Haddington Road Agreement.
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